Ignoring the adr's you could substitute SAP with SSAX and change the date back 6 years or so and argue your way into owning this maturing company all the way down.
The high end market is mature, the mid range has much more competition and although there are many more deals, they are much smaller. FOR SAP to keep growing, they must sell an INCREASING number of new customers at the same ASP each year.
That will be especially hard since their business was artificially stimulated by y2k remediation. Many companies that could have put off purchases to later times, bought in the 1995 to 1998 time period.
AMR's market estimates are self justifying nonsense, since they are saying that all enterprise apps are "ERP." I wonder how SAP will do in the front office versus Siebel?
Gee, in addition to trying to keep their existing legacy customers happy and laying off staff, they are desperately trying to create products that must integrate with their existing systems in the following areas:
sales force automation
supply chain
document management
workflow
data warehousing
rolap
customer service
facilities maintenance
e-commerce
enterprise integration
dbms tools
and many others....
I'm sure they'll do almost as well as Lotus did in creating 1-2-3 for Windows in all of these new areas, especially since they have no competition.
Yeah, they'll "grow" in 1999, but only in service revenues. I'll make this bet: they don't see anything near 10% license growth in 1999 and 2000, then in 2001 services will fall off. It will take time, but you are at the beginning of the end of the growth for this mature company.
Caveat: Yes, I am and have been short for some time.
TD |
