Let's tone down the enthusiasm about SAP's preliminary 2009 results.
A lot of industry analysts are hoping it means the end of the lethargy in the enterprise software market. But that's all these analysts are doing: hoping. The numbers say different.
The SAP 2009 preliminary result of $8.19B in "software" (including maintenance, software as a service, etc. but not professional services such as training and implementation help) in annual revenue means SAP's fourth calendar quarter results equalled about 31% of SAP's annual software revenue, the typical SAP fourth quarter.
Investment analysts knew this number in October. The SAP numbers would have been newsworthy only if they had fallen way below the company's seasonal average. (For precision's sake, if you check past years on the SAP Investor Relations site for this information, you'll find a number around 33% for 2006 and 2007 but those reports do not include Business Objects' results. Business Objects did not have as pronounced a hockey stick as SAP historically.)
Speaking of Business Objects, somewhere between $50 and $100 million in early 2008 Business Objects revenue is not included in the SAP 2008-2009 compare. A more rigourous 2008-2009 compare increase the SAP year over year deflation rate even more. SAP's acquisition of Skydata, Clear Standards, SOALogix, SFA and High Deal during 2009 also makes it worse on an apples to apples basis although not by much.
I am not saying there is bad news here but I cannot get all excited that the SAP software results were "down only 3%" instead of 5% in euros.
By the way, that's down about 8% in dollars using the average 2009 euro-dollar exchange rate. On the other, I think SAP will actually show a dollar-denominated 2008-2009 increase when it releases its 20-F in March because its methodology--consistently (it is not gaming the system here)--is to convert
"... euro financial data... into dollars at the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York" on the last business day of the given year.
That was about US$1.39 per €1.00 in 2008 and around $1.44 to the euro in 2009 so the 8.5 billion in euro in 2008 becomes $11.7 billion and the 8.2 billion in euro in 2009 becomes $11.8 billion.
But that's just based on scribbling here on the back of an envelope. The real news is that there is no real news in this story.
-- Dennis Byron