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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: DownSouth who wrote (28448)7/20/2000 4:47:44 PM
From: Mike Buckley  Read Replies (5) of 54805
 
We've often discussed that the inherent power of a Gorilla is sufficient to prevent the company from being decimated (what is the right word?) despite periods of two or three years when management executes poorly. It will be fascinating to watch SAP's progress as a potential case study about that point. Seeing the results of their quarterly report indicates that the turn-around may be working.

For people not familiar with SAP, it used to be the second-largest software company (or was it third?) in the world, the clear Gorilla of enterprise resource planning (ERP). Its stock has done horribly the last couple of years because its growth slowed while other software companies have sported huge growth. Probably the biggest reason the company had problems is because it was very late to develop web-centric software. A late response to that problem was the introduction of mySAP.com.

During the previous quarter mySAP licensing surprised everyone by quickly contributing 22% of the company's licensing revenue. During the most recent quarter it contributed 47% and the average contract size for the Internet software is more than three times the size of the traditional software deal.

The above is an oversimplification of the complete story, but those who want real-life, real-time examples of Gorilla Gaming in progress will likely benefit from watching SAP's future unfold.

--Mike Buckley
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