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SAP Knows Something Oracle Does Not (Correct)

While revenue from on-premise software, the old enterprise space, fell 5% from the prior year, the company said its cloud subscription and support revenues rose 146%, year over year, to $269 million. The company said in its earnings call that 30% of its revenue in the Americas now comes from cloud.

Total operating profits were up just 5% year-over-year, to $1.8 billion, but that masked both the successful transition and the strong Euro. It was also in sharp contrast to the latest quarterly number from Oracle and IBM, both of which disappointed the street.

McDermott had been talking up HANA and the possibility of new earnings momentum since the summer, but it still seems to have caught traders by surprise. Over the last three months the stock had twice fallen into the $71/share range, and only began its decisive move up to today's $78/share price last week. Over the last month SAP shares are up almost 6% in price, while Oracle is down 3% and IBM is down almost 8%.

If the whip hand in enterprise computing has moved to SAP there's an irony in it. The world's first commercial computer, ENIAC, was developed at the University of Pennsylvania, a little over 12 miles from SAP's U.S. offices.

At the time of publication, the author owned 117 shares of IBM.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Dana Blankenhorn has been a business journalist since 1978, and a tech reporter since 1982. His specialty has been getting to the future ahead of the crowd, then leaving before success arrived. That meant covering the Internet in 1985, e-commerce in 1994, the Internet of Things in 2005, open source in 2005 and, since 2010, renewable energy. He has written for every medium from newspapers and magazines to Web sites, from books to blogs. He still seeks tomorrow from his Craftsman home in Atlanta.
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