This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

SAP Knows Something Oracle Does Not (Correct)

(Corrects article published at 10:23 a.m. ET to fix the first name of the CEO of SAP and to remove other references to Brian McDermott.)

NEW YORK ( TheStreet) -- SAP (SAP - Get Report), long the main rival to Oracle (ORCL - Get Report) in the database applications space, is rising today after reporting double-digit growth in the third quarter.

More important than the growth was the cause, an enterprise cloud unit run by Bjorn Goerke, who was appointed the company's chief information officer this week.

The transition from "enterprise" architectures, with server farms on customer premises, to cloud-based systems is as tricky as the movies' transition from silents to talkies in the 1920s. Many stars didn't make that leap, and many companies won't make this one.

While SAP is technically a German company, it also trades on the New York Stock Exchange and the co-CEO is an American, Bill McDermott, who works out of the company's offices in Newtown Square, Penn., outside Philadelphia.

Unlike Oracle CEO Larry Ellison, McDermott keeps a low profile. McDermott has been co-CEO, with Jim Hagemann Snabe, who works out of Walldorf, Germany, since 2010, which was also the year SAP decided to focus on cloud.

Under McDermott and Snabe, SAP has evolved its HANA in-memory database architecture into a cloud platform. By storing key data in-memory rather then on disks, HANA is able to work in real time. Complete systems can be up and running for as little as $300,000, according to a Wikibon primer on it, but many installations cost $2 million and more.

It's a different way of evolving from old-fashioned enterprise systems to new cloud architectures, rewriting the way databases are handled rather than trying to build hardware, as Oracle does. SAP says HANA combines database and application platform capabilities. In practical terms it means SAP gains full control over its customers.

SAP offers hardware through a collection of business partners, rather than making it itself. These include IBM (IBM), but also Hewlett-Packard (HPQ), Cisco (CSCO), and Dell, along with Hitachi and Fujitsu of Japan.

Just how dependent SAP has become on HANA was demonstrated last month by its decision to shift its small business ByDesign business onto the mainstream HANA platform.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
ORCL $43.46 1.90%
SAP $72.96 0.58%
AAPL $125.34 1.70%
FB $82.70 -0.72%
GOOG $551.36 0.55%

Markets

DOW 17,993.03 +280.37 1.58%
S&P 500 2,082.50 +21.48 1.04%
NASDAQ 4,931.18 +39.9610 0.82%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs