SAP Cloud computing Weakness in Oracle

The Monday analysis reported that SAP spent 3.4 billion (equivalent to £ 2.17 billion) in the dollar acquisition of SuccessFactors, although at first glance it gave a very high price, but this will make it in the cloud computing industry in the wild competition to catch up with others.

"We think SuccessFactors is an excellent strategy for SAP cloud development, and we prefer to make decisions that grow outside of this 8084.html > boom," says Oliver Finger, analyst at DZ Bank. ”

SAP said they acquired the US internet services company, SuccessFactors, in Saturday, agreeing to a price of $40 per share and a 52% premium.

The deal helped SAP to catch up with rivals in cloud computing, a rapidly growing area of remote managed data and programs on the Web. As part of the deal, Lars Dalgaard, founder and CEO of SuccessFactors, will join the SAP Executive Committee and invest in cloud industry operations.

"This marks the default of SAP's cloud strategy," said Roger Phillips, Evolution Nomura analyst. ”

2:20,sap shares fell 2.4% per cent in the afternoon to the UK and now cost € 43.635, while Germany's blue-chip Dax rose 0.7%.

Analysts have warned that SAP has risked losing to Oracle in cloud computing. However, there are already not many assets in the enterprise to buy it.

Rival Oracle bought RightNow Technologies,netsuite, a major part of Oracle CEO Larry Ellison, in November, when it was thought Salesforce.com too big to buy.

WestLB analyst Jonathan Crozier said: "In fact, we do not know who is the next successfactors." For this reason, although the price tag appears to be very expensive on the surface, we still cannot rule out the risk of counter-offer. ”

"SAP pays successfactors eight times times the 2012 forecast, 5.5 times times the price that Oracle pays RightNow," analysts said.

Nomura analyst Rick Sherlund said: "The deal is highly valued, but we think it is reasonable to take into account the high growth strategic assets being acquired." ”

SuccessFactors's operating margin jumped from 0% at the beginning of the year to 9% in the third quarter, and the company said it was not hiring as fast as it needed to meet current demand.

Its shares have increased by 26% in the past three months, creating 2.2 billion of the market value for the company.

Heino Ruland, an analyst at Ruland, said he thought the acquisition was too expensive, and said cloud computing technology was continuing to warm up to the extent to which market participants had been exposed to unreasonable consumption. This reflects a larger web bubble than it was 10 years ago.

SAP raised its view on the prospects for the deal, saying that SAP revenues could easily reach € 21 billion by 2015, 1 billion euros more than expected.

SAP said the deal would damage its 2012-year earnings but would have a positive effect since 2013, prompting analysts to revise the data to reduce the estimate for 2012.

SuccessFactors sold shares for the first time a decade ago at $10 a share, helping companies use human resources software to view employee performance. Competitors have Taleo and kenexa companies.

In the deal, JPMorgan Chase proposed for SAP, while Morgan Stanley suggested SuccessFactors.

(Responsible editor: The good of the Legacy)