This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

SAP Knows Something Oracle Does Not (Correct)

Stocks in this article: SAP ORCL IBM HPQ CSCO

(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), long the main rival to Oracle (ORCL) 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

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

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