This Day On The Street
Continue to site
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

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.
2 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
Only $9.95
14-Days Free
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!
ORCL $43.08 0.00%
SAP $75.18 0.00%
AAPL $130.28 0.00%
FB $81.53 0.00%
GOOG $565.06 0.00%


DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs