SAP (NYSE:SAP) is one of the largest enterprise software giants besides Oracle (NASDAQ:ORCL), Microsoft (NASDAQ:MSFT), IBM (NYSE:IBM) and Salesforce.com (NYSE:CRM). Its stock has moved higher in the last couple of weeks backed by some positive developments related to SAP and improved investor sentiment for blue chip tech stocks.
SAP had announced that it would be focusing on three major trends in the coming years to grow revenue – mobile, big data and cloud computing. It has already made some major moves in a couple of those areas.
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It finally made a big-ticket acquisition when it bought SuccessFactors, a leading provider of cloud based HR (human resource management) solutions. SAP will integrate SuccessFactors’ technology, which consists of on-demand services and tools which help companies manage performance, goals, objectives, compensation and other employee related issues, into its Business ByDesign ERP suite. SuccessFactors will give SAP significant headway in the cloud computing software market, which every major enterprise software giant is trying to crack. It will also boost its ERP market share, which is expected to decline due to increasing competition in the space.
SAP also made a significant move to capitalize on the growing mobile software usage in the enterprise, launching a new enterprise mobile app store which works with all major smartphone platforms – Android, iOS, Windows Phone and Blackberry. SAP will take a 15% cut from app sales in the store, which could mean another major revenue stream in the coming years if its enterprise mobile app store takes off.
We currently have a $63 Trefis price estimate for SAP, which implies around 5% upside to its stock price.