SAP, Not To Be Confused With Salesforce

over 3 years ago

In 1999, Marc Benioff left his job at Oracle and co-founded Salesforce. His company’s mission was to that software should be delivered 24/7 to people over the cloud. This was a novel idea and mission as most companies in the 1990s like Oracle and SAP were selling software to businesses that had to be installed and updated on-premise.

In 2004, Salesforce went public and on the first day of trading, the stock went up 55%. The successful IPO was a testament to how Salesforce had built a product people loved and successfully started selling people on their vision for the cloud. Then they started building out other products and buying complimentary companies to look for ways to add more value to their customers in order to be a “one stop shop.”

Speaking of SAP, SAP SE operates as an enterprise application software, and analytics and business intelligence company worldwide. The German provider of enterprise software and related services gave an update of their full-year guidance by announcing that they lowered the midpoint of its full-year revenue guidance range by 2%. Well, the Markets didn’t like it and told SAP by tanking their stock price.
Marc Benioff quickly made an announcement of his own, stating that SAP issues are their issues and not ours.

Salesforce.com Inc. Chief Executive Officer Marc Benioff criticized rival SAP SE’s business performance in stark terms, rejecting the notion that the German software giant’s challenges are an omen for his company.

At “SAP, you can see they’re having very significant troubles with the CEO transition they’re going through,” Benioff said Monday in a Bloomberg Television interview. “They, as you know, moved from one CEO to two, they fired one of those two CEOs. The CEO transition is just not going well and their customers are saying that. Now you can see that their revenues are also reflecting this trouble.”

Source

Just today, both Germany and France announced new nationwide lockdowns on Wednesday as Europe continues to see out of control spikes in COVID-19 cases. SAP’s original guidance was based on fewer COVID-19 lockdowns and a more rapid reopening of closed-down industries globally. However, SAP has gotten so beat up that the weekly chart suggests it's a buying opportunity.

This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.

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