SAP SWOT

COMPANY PROFILESAP SE REFERENCE CODE: BAD259E2-8800-4E53-8366-80B825AB36A2 PUBLICATION DATE: 12 Dec 2014 www.marketline.com COPYRIGHT MARKETLINE. THIS CONTENT IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED OR DISTRIBUTED. ................................................................4 SAP SE © MarketLine Page 2 .........3 SWOT Analysis.....................................................................SAP SE TABLE OF CONTENTS TABLE OF CONTENTS Company Overview.................................................................................................................3 Key Facts.................................................... The company recorded revenues of E16.8% over FY2012.3 million) during the financial year ended December 2013 (FY2013).0 (EUR Mn) Financial Year End December Employees 66. development. and other services for its software solutions.1 million) in FY2013. and cloud subscriptions. training. SAP operates in the Americas.572 people as of December 31.326 million ($4.com Revenue / turnover 16. Germany and employed 66.815 million ($22. the Middle East and Africa (EMEA) and Asia Pacific Japan (APJ).7% over FY2012. the company also offers support.479 million ($5. solutions.815. an increase of 18.SAP SE Company Overview COMPANY OVERVIEW SAP SE (SAP or “the company”) is engaged in selling licenses for enterprise application software products. The net profit was E3.6% over FY2012.572 XETRA Ticker SAP New York Ticker SAP SAP SE © MarketLine Page 3 .948. an increase of 3. The operating profit of the company was E4. 2013.9 million) in FY2013.416.330.sap. KEY FACTS Head Office SAP SE Dietmar-Hopp-Allee 16 69190 Walldorf DEU Phone 49 6227 7 47474 Fax 49 6227 7 57575 Web Address http://www. It is headquartered in Walldorf. consulting. In addition. an increase of 10. Europe. 2% of SAP' revenues. Furthermore. However. rest of EMEA (32%). intense competition may lead to pricing pressures thereby adversely impacting the financial performance and market share of the company. solutions. followed by consumer (22. the company is well positioned to tap into growth opportunities offered across the regions. By catering to diversified industries. and rest of Americas (10.5%). SAP derived approximately 27. SAP has diversified geographic presence with operations in more than 180 countries. In FY2013. SAP's diversified presence across geographies diversifies its business risks. the energy and natural resources group generated approximately 24.7%). In addition. and financial services (9. Germany (14. Strengths Weaknesses Diversified end markets and geographic reach Extensive partner network Robust research and development capabilities Strong financial position Lack of scale and product diversification Opportunities Threats Increasing adoption of cloud computing Growing demand for enterprise mobility Big Data presents growth opportunity Intense competition Risk from exchange rate fluctuations Strengths Diversified end markets and geographic reach The company has developed deep expertise within specific industry groups. For FY2013.7%).5%). The company follows a vertical strategy and offers around 25 industry-specific solutions.1%).The company's revenue growth from all the regions has been fairly balanced and all regions except Japan registered a growth on a year on year basis in FY2013. and cloud subscriptions.SAP SE SWOT Analysis SWOT ANALYSIS SAP SE (SAP or “the company”) is engaged in selling licenses for enterprise application software products.7% of its revenues from the US.1%). rest of APJ (11. discrete manufacturing (17. SAP's diversified presence across geographies diversifies SAP SE © MarketLine Page 4 . public services (10.8%).8%). which are categorized into six groups. the company reduces vulnerability to industry specific risks and also enhances the revenue generation opportunities for the company.9%). Japan (3. services (15. It also acts as a competitive advantage over its peers. Extensive partner network SAP has an extensive partner network. It has also enabled SAP to develop innovative products.500 validated patents worldwide and of these. Furthermore. SAP's R&D expenditure was E2. more than 700 were granted and validated in FY2013. and by providing implementation and other services. by developing solutions that complement SAP software.500 partners as of FY2013. in March 2014. the company’s partners collectively had more than 380. SAP launched a rapid-deployment solution that enables businesses embracing bring-your-own-device (BYOD) policies to offer secure mobile devices. SAP' research is directed towards development of new products and solutions and towards building technological capabilities in the enterprise application software markets.5 million). and works with partners on new product initiatives. In FY2013. representing approximately 13. in February 2014. In addition. and deploy the ideal solutions to address their business needs. SAP partners help companies of all sizes identify. The company's robust R&D capabilities enable it to uphold the technological leadership in most of its product segments. and more. For instance. The company is focused on developing innovative technologies and is well-positioned to participate in future development programs. As of FY2013.000 skilled resources in SAP solutions and technology. Robust research and development capabilities The company has significant focus on research and development (R&D) activities which enables it to launch new and innovative products. The company’s partners operate independently of SAP and complement SAP’s business by selling software. The company holds 5. The research prototype is based on the SAP HANA Cloud Platform and will provide personalized services to drivers based on their location and route. the company is well positioned to tap into growth opportunities offered across the regions. the company developed a technology infrastructure for in-vehicle mobility services in collaboration with BMW Group Research and Technology. purchase. SAP also engages with the partner community in the development of new solutions. The company’s strong partner network provides significant and sustainable value to the company in expanding its revenues and geographical spread. This collaboration brings SAP one step closer toward making its vision of the connected car a reality. Strong financial position SAP SE © MarketLine Page 5 .030. leading to strong sales. SAP' strong focus on R&D allowed it to develop new solutions as well as enhance the existing products. hosting. system integration. SAP has strong partnerships with a broad network of IT professional services firms that provide consulting.6% of its revenues. education. Also. SAP value-added resellers (VARs) and multitier distribution channels offer local market and industry expertise that addresses specific market needs. it owns a strong portfolio of patents and has several pending patent applications.SAP SE SWOT Analysis its business risks.282 million ($3. comprising of approximately 11. content and apps. including. the operating margin and net margin increased from 24. Cloud computing is a computing infrastructure model. an increase of 3. SAP's relative lack of scale and product diversification limits its ability to compete effectively.330. and servers. operating systems.815 million ($22. The company provides the complete set of cloud offerings. its pricing strategies and its control over the costs. To strengthen its presence in the rapidly growing market for cloud SAP SE © MarketLine Page 6 . Strong financials enhances its shareholder's value and allows the company to fuel its expansion plans. The net profit was E3. The market is expected to be driven by smartphones. Opportunities Increasing adoption of cloud computing The worldwide demand for cloud computing services is expected to record strong growth in the coming years. desktop applications. cloud applications. The appeal of cloud computing has been increasing as it enables companies to reduce expenses such as upfront royalty or licensing payments. while competitors also address other segments of the IT market. Some of its competitors such as Microsoft and Oracle have greater financial strength and diversified product portfolio. Microsoft reported revenues of $77. respectively in FY2013. an increase of 10. an increase of 18.3 million) during FY2013. Weaknesses Lack of scale and product diversification The company lacks the scale and product diversification to compete with other major players. hardware and online business services.849 million during the year ended June 2013. Oracle provides database and middleware software and applications software for enterprises. Its major competitor.8% over FY2012. Microsoft. tablets and high-speed internet access demand. the company lacks product diversification when compared to its competitors. SAP concentrates on the business software segment. investment in hardware infrastructure and other operating expenses.1 million) in FY2013.6% over FY2012. For instance. SAP has increased its focus on cloud computing in the recent times. is diversified into networking.416.6% and 19. and business network services. cloud platform. In addition. As a result.180 million during the year ending May 2013. In addition. The improved margins are an indicator to measure the profitability of the company. Consequently.3% in FY2012 to 26. public cloud services market is forecast to grow at a CAGR of 23.8%. cloud services. Comparatively.9% and 17.5% during 2013-17.9 million) in FY2013. SAP reported revenues of E16.479 million ($5.330.3 million) in FY2013. Improved profit margins indicate the management's efficiency is investing in profitable ventures. while Oracle recorded revenues of $37.7% over FY2012. The operating profit of the company was E4. SAP recorded revenues of E16.815 million ($22. operating systems.SAP SE SWOT Analysis The company reported strong financials in FY2013.326 million ($4. which enables delivery of software-as-a-service (SaaS). such as database management applications.948. the demand for cloud computing services has been increasing and is expected to grow rapidly and cross $241 billion by 2020. Moreover it is also estimated that. Big Data presents growth opportunity Big Data. SAP SE © MarketLine Page 7 . in October 2013. energy and geophysical. which is a primary contributor to the pace of overall data growth. and with options to deploy on premise. entertainment. It also refers to the new analytics and other technologies that are available to help people do things with the significant amount of enterprise and external data. SAP and Accenture decided to create a new business group focused on jointly developing and delivering new industry-specific solutions based on cloud and other digital technologies. including medical. According to industry estimates.3 billion by 2018. content and apps. Moreover. the company also made a number of significant acquisitions. Similarly. social media and other web repositories. The SAP Mobile Secure portfolio provides compliant access to corporate data.SAP SE SWOT Analysis computing. SAP launched a rapid-deployment solution that enables businesses embracing bring-your-own-device (BYOD) policies to offer secure mobile devices. a joint venture between SAP and China Communication Services. Also. in November 2013. emergence of sophisticated mobile devices such as tablets and smartphones and introduction of several business applications is expected to drive the market for enterprise mobility over the next few years. SAP's increasing presence in the expanding cloud computing domain and the rapidly growing end market will provide the company with the steady revenues and increasing customer base. Japanese multinational NEC entered into an OEM agreement with SAP to integrate the SAP Business ByDesign solution with its global cloud-based ERP services. SAP has increased its focus on enterprise mobility solutions in the recent times. According to industry sources. growing at a CAGR of more than 40% for the 2012-18 periods. Growing demand for enterprise mobility The market for enterprise mobility solutions has been growing at a rapid pace. Increasing mobile worker population. the market for enterprise mobility solutions is expected to exceed approximately $174 billion by 2017. Further in January 2014. Further in March 2014. For instance. in the cloud or in a hybrid environment. SAP and China Telecom entered into a strategic partnership in cloud computing pursuant to which the SAP Cloud portfolio will be offered to small and large organizations in China by China Datacom. in March 2013. including Ariba and SuccessFactors. the total amount of digital information is expected to reach 40 zettabytes by 2020. a solution that addresses the mobile security needs of enterprise IT. 70% of enterprise organizations would have either deployed or are planning to deploy Big Data-related projects and programs in 2014. the global Big Data market is expected to reach $48. including unstructured information created by new applications. as per the customers’ needs. the company collaborated with Samsung to provide mobile security and management solutions for Samsung KNOX. The positive outlook for the enterprise mobility solutions and the company's increased focus on this business will enable it to enhance its customer base and market share in the coming years. refers to the large repositories of corporate and external data. Its offerings also compete with those of specialized vendors in various local markets and sub-segments. SAP HANA enables organizations to analyze business operations based on a large volume and variety of detailed data in real time. Threats Intense competition The company operates in a highly competitive and rapidly evolving software industry. As part of the partnership. The company has established strategic partnerships with leading companies to enhance its Big Data offerings. In addition.com. increased focus. Moreover. Further. SAP's principal competitors in the database and technology business include IBM. Workday. in September 2013. In general. the company entered into an agreement to acquire KXEN. Intense competition may lead to pricing pressures thereby adversely impacting the financial performance and market share of the company.SAP SE SWOT Analysis The company is keen to take advantage of this growth opportunity. Microsoft. Competitors with offerings that overlap with SAP's include Pegasystems and Spring Mobile Solutions. and NetSuite. in February 2014. the company faces line-of-business players such as Salesforce. For instance. SAP entered into a strategic partnership with business analytics software company SAS to advance in-memory data analysis capabilities for businesses across industries. and Oracle. in October 2013. and Oracle (Hyperion). SAP's non-Euro based sales gives rise to substantial foreign exchange exposure. SAP’s technology strategy centers on SAP HANA as the real-time in-memory computing platform for analytics and applications. the company and big data analysis solutions provider Vendavo expanded their development road map and partnership based on the SAP HANA platform aimed at providing customers with new real-time profit optimization solutions. The company’s strong presence. and the positive outlook for the end market provide it with an opportunity to gain more customers and increase its revenues in future. Risk from exchange rate fluctuations SAP operates globally and is exposed to foreign exchange risk arising from various currencies. The magnitude of foreign exchange exposures changes over time as a function of the company's presence in different markets and the prevalent currencies used for transactions in those markets. along with the SAP HANA platform is intended to help companies harness the Big Data opportunities. Similarly. a provider of predictive analytics technology. In the same month. depreciation of another currency relative to the Euro will have a negative impact on the company's sales and SAP SE © MarketLine Page 8 . SAS Institute. Oracle. the company expanded its relationship with DigitalRoute. and Microsoft. in the cloud market. The mobile market is still highly fragmented. SAP's primary competitors in applications include IBM. The combination of KXEN with SAP. The company's key competitors in analytics include IBM (Cognos). the companies intend to create a joint technology and product roadmap designed to leverage the SAP HANA platform and SAS analytics capabilities. a provider of new approaches to Big Data management to enhance the customer experience of telecommunications companies. Since the company has subsidiaries outside the Euro zone. the Euro-denominated value of the shareholders' equity of SAP is also exposed to fluctuations in exchange rates. respectively. SAP SE © MarketLine Page 9 . In addition.SAP SE SWOT Analysis operating profit. Approximately 71% and 72% of SAP's total revenue in FY2013 and FY2012. These transaction exposures are managed against various local currencies because of the company's substantial production and sales outside the Euro zone. Exchange rate fluctuations from time to time may significantly weaken the company's results of operations and financial condition. foreign currency denominated assets and liabilities together with foreign currency denominated cash flows from highly probable or probable purchases and sales contribute to foreign exchange exposure. was attributable to operations in non-Euro participating countries. Copyright of SAP AG SWOT Analysis is the property of MarketLine. or email articles for individual use. users may print. download. . 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