Weekly Software Notes: Oracle, Salesforce and SAP
Software giants Oracle Corp. (NYSE: ORCL), Salesforce.com (NYSE: CRM) and SAP SE (NYSE: SAP) all made new additions to their product line up during the week ended March 14th. Oracle made the biggest move by adding support for Instagram and Weibo to its Social Cloud, while Salesforce jumped on the wearables bandwagon by introducing enterprise apps for the Apple Watch. European software major SAP SE (NYSE: SAP) was also active during the week and released two new products.
Share prices of each of the three companies remained subdued during the week. Shares of Oracle and Salesforce ended the week flat, while SAP fell by 1% Monday through Friday. In comparison, the Dow Jones U.S. Software Index as well as the broader S&P 500 index fell by 1% over the week.
In this report, we take a look at the key updates on the aforementioned companies during the week ended March 14th.
See our complete analysis for: Oracle Corp. | Salesforce.com | SAP SE
Oracle Corp.
On March 13th, Oracle announced that it has updated its Social Cloud to add support for Instagram and Weibo. [1] Instagram is an image-sharing platform and is one of the fastest growing social networks in the world. Weibo is the Chinese analog to Twitter and is used by over 175 million Chinese customers and 800,000 businesses. The Oracle Social Cloud will now provide engagement and analytics support for Instagram, and publishing, engagement and analytics support for Weibo.
Both Instagram and Weibo are extremely popular and widely used social networks. By casting expanding its analytics coverage to include Instagram and Weibo, Oracle will be able to provide a possibly unmatched range of consumer information. Further, given that Facebook (NYSE: FB) and Twitter (NYSE: TWTR) are blocked in China, businesses lose out on social analytics in the Chinese market. This is set to change with Oracle’s addition of Social Cloud support for Weibo.
However, it is worth noting that Salesforce, which is Oracle’s biggest competitor in Cloud Analytics, has been providing social listening coverage on Weibo since as far back as 2013. [2] This underscores the fact that Oracle is still playing catch up to Salesforce in the cloud business. Nevertheless, there are indications that Oracle might have caught up to Salesforce in the latter’s home ground, the Customer Relationship Management segment. [3]
We have a price estimate of $47 for Oracle, which is about 10% higher than its current market price.
Salesforce.com
Salesforce entered the wearable technology fray during the week by becoming the first company to offer enterprise apps on Apple Watch. [4] The company quoted a recent report by Forrester Research, [5] which stated that 68% of the executives consider wearables a priority for their companies, as the reason for jumping into the wearables fracas.
Salesforce has introduced three offerings for the Apple Watch, namely, Salesforce Analytics Cloud, Salesforce1 and Salesforce Wear Developer Pack. The Analytics Cloud was launched as recently as December 2014, and Salesforce has already brought it to the Apple Watch for no additional cost over and above the Analytics Cloud license. The Salesforce1 for Apple Watch delivers notifications to employees and agents based on their roles. The Analytics Cloud as well as the Salesforce1 app are designed to provide a quick snapshot rather than detailed information. Lastly, the Salesforce Wear Developer Pack provides a platform for building enterprise apps for the Apple Watch on the Salesforce1 platform.
Pricing details of the Salesforce1 app and Salesforce Wear Developer Pack were not disclosed. It is clear that the success of these products hinges on adoption of the Apple Watch for business use, which is an uncetain scenario at best. Given that adoption of wearable technology has not yet taken off even among consumers, it can be safely said that use of the Apple Watch for business purposes is a ways off. Therefore, Salesforce would be well served to gain at least a nominal incremental revenue from these products, rather than giving them away for free as it has in the past (Read: It’s Products Galore From Enterprise Software Vendors).
We have a price estimate of $60 for Salesforce, which is about 10% lower than its current market price.
SAP SE
On March 10th, SAP announced that the release of the ‘SAP Lumira Solution, Edge Edition’, a low-cost data discovery and visualization solution aimed at small businesses. [6] With SAP Lumira, users will be able to create, view, modify and share data visualizations and infographics within their browser. Details of pricing were not disclosed, but given that this product is being marketed as “cost effective” and is targeted at small businesses, it can be safely assumed that the incremental revenue therefrom will not be significant.
Earlier, SAP also released a contextual marketing platform for telecommunication companies, in the form of enhancements to the so-called SAP hybris marketing solution. [7] The hybris marketing solution is a general-purpose product that centralizes customer data into a central hub, facilitating discovery and analysis of context-based data for contextual marketing. Now, SAP has added specific functionality to this solution for the telecommunication industry.
The move puts SAP ahead of Salesforce, which has only recently come out with its own data science solution for its Marketing Cloud (Read: Salesforce Adds The Power of Data Science to Its Service and Marketing Clouds).
We have a price estimate of $78 for SAP, which is about 15% higher than its current market price.
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More Trefis Research
- Oracle Social Cloud Adds Support for Instagram and Weibo, Oracle Press Release, March 13, 2015 [↩]
- Salesforce.com Accelerates Salesforce Marketing Cloud Industry Leadership, Salesforce Press Release, July 11, 2013 [↩]
- Salesforce.com and Oracle Running Neck-and-Neck for CRM Lead in Latest Nucleus Research Value Matrix, SAP Continues to Falter, Nucleus Research, March 11, 2015 [↩]
- Introducing Salesforce for Apple Watch: Inspired by the Consumer, Built for Business, Salesforce Blog, March 9, 2015 [↩]
- Five Urgent Truths About The Future Of Wearables That Every Leader Should Know, Forrester Research, December 8, 2014 [↩]
- SAP Brings Data Discovery and Visualization to Small and Midsize Businesses, SAP Press Release, March 10, 2015 [↩]
- SAP Announces Contextual Marketing Platform Designed for Telcos, SAP Press Release, March 3, 2015 [↩]