SAP Earnings

We announced our earnings today, here’s a couple of highlights:

– We just put up our best first quarter in history featuring 22% growth in software revenues (that’s 9 straight quarters of double digit growth for those of you counting).

– U.S. software revenues grew 25% (McDermott is on fire, 14 consecutive quarters of software license growth). Our software license sales are 43% greater than Oracle’s.

– Asia Pacific delivered 12% year over year growth, putting up numbers that are 2.5x that of Oracle’s in the same region.

– EMEA grew 7%… Oracle’s quarterly EMEA sales are close to one month of our EMEA sales

– In Q1 alone, 24 Oracle customers (including Siebel, Peoplesoft, JDE, and Retek customers) committed to replacing their software with offerings from SAP. In Q1 there were 27 new maintenance contracts for TommorrowNow. To put that in perspective, there have been zero OFFSAP wins, not just in the quarter but to date.

– Oracle’s stated Q3 2006 application license revenue is 35% less than the Q3 2004 combined application license revenues of Oracle, PeopleSoft, Retek and Siebel prior to any Oracle acquisition.

– With Q3 2006 world-wide application license revenue of $269 million, Oracle sold roughly as much software as SAP sold in the Americas alone in our Q1 2006.

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Software service networks, not product stacks

The other day there was an article in CNET titled “Software’s Stack Wars” and in reading it my first thought was to be a little irked that they labeled NetWeaver as simply middleware, however a little bit later I was thinking about it and it occurred me that the entire premise of this article is just wrong. Every single company mentioned in the table is a partner with every other company in the list, and you could include EMC and Cisco as well as they have their own legitimate platform aspirations. Nobody is really expecting to get into a position that locks out any other other companies, the reality is much more that various components interoperate in our client’s datacenter.

We are well past the days when stacks were truly monolithic in nature and static in their linkages, in fact you could reasonably suggest that the forward thinkers in this business stopped thinking that way as early as the CORBA days and more broadly following the advent of true web applications. It used to be a big deal for application vendors to publish their API’s, even though they were little more than naming the objects and methods the app was built with and some external port to call them; today people expect a full blown services layer that is analogous RPC on steroids, in other words actually driving an application component remotely instead of just getting/giving some data.

REST has further uncomplicated the software business, even though most established vendors have yet to realize the quantum leap in capabilities that it brings to them. Too much of enterprise software is still client/server with the client stuffed inside of a web browser. REST, along with scripting, opens up some incredible capabilities for application developers and those people deploying and using them, it frees up the requirement for “state” in an application workflow and realizes what the early proponents of web architectures advocated, an application that is highly personal and delivers just the functionality that a user requires instead of what the app vendor packages together.

At the ES Forum (will try to find a link) that SAP hosted the other day for partners, Shai said emphatically that “we are not a platform company, we’re an application company”. I dismissed that initially as “well yeah, we’re an app company that happened to also build a platform” but upon further reflection I think I see where he is going with it, which is ironically coming full circle with the CNET piece I started on. What the CNET author didn’t realize or think to explore is actually exactly where application vendors are going, and I can’t sum it up any better than the first commenter to the CNET article itself.

TalkBack: Best of breed – ancient history | reader response on CNET

Yessir, in tomorrow’s world value will come from leverage of software service networks, not software product stacks.

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WSJ ran an article yesterday about making money from blogging. There was a healthy dose of skepticism about the entire notion, but Calacanis made a quote that pretty much nailed it:

However, you are correct that the majority of folks are not going to make a living from blogs, but that’s because they choose not to try, not because they couldn’t. If folks focus in on a niche and own it there is a good chance they could make half a living from blogging.

This gets to the quality dynamic that I am interested in seeing more research on, and alluded to in my comments about Dave’s state of the blogosphere report recently. The great majority of blogs are simply copy-and-paste pages or blogs posted to erratically and/or with little insight or originality. I want to find the ones that are attempting to “own” a space.

Take a look at Tom Foremski as someone who is making a living from blogging, and what you will no doubt notice is that he is making money from blogging by approaching it as a job and not a hobby. Tom is also a journalist by training, a skill set that is obviously highly leverageable into blogging, as is the case with Matt and Mike.

People often ask me if I run or want to run advertisements. I’ve thought about it, and in fact I did have some ads on my typepad blog, but I just feel that I need to build this thing out a little more before I can qualify myself in that respect. Like a lot of bloggers I have talked with lately, we all seem to be asking the question “what’s next”, which I guess you could characterize as a true inflection point. It’s difficult at times for me to devote the time required to blogging what I think is worth reading (after all, I do have an actual job outside of this!), but at the same time I enjoy a lot of personal and professional reward for doing it.

I don’t think google adsense is the way to go for me (I’m still irritated at Google anyway) but dedicated sponsors does seem like a good fit. I am in the midst of developing out a new set of templates and widgets for Venture Chronicles and getting some brand issues sorted out, I’m loosely estimating that in 6 weeks I’ll be able to roll this out and at that time I’ll have a better platform to consider monetizing it to at least cover my costs.

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Cocoa widgets in Firefox, Thunderbird progressing nicely.

When I switched to the Mac I just assumed that I’d still be using Firefox, then I experienced the crashes, the slowness, that Firefox is a memory hog, and that I didn’t have the same services that other Mac applications have… so I switched to Camino (on Om’s recomendation). I miss the extensions and bookmark bar in Firefox greatly, as well as the theme capability.

That Firefox is implementing Cocoa widgets (which make a Mac app truly a Mac app) is a good thing, and also a lesson for other applications that actually run on a client. You can’t just expect to write something in Java or PHP or Ajax or whatever and then say “it’ll run on any platform” if you really expect to support specific platforms. Windows (especially Vista) and OSX have vastly different architectures and services available for applications, and pro-sumers in those markets (who are also the source of your word of mouth) expect you to support them.

Infinite Loop: Cocoa widgets in Firefox, Thunderbird progressing nicely.:

Camino is nice and all (it’s my daily browser, in fact), but Firefox is unparalleled in its plugins and installed userbase / community. One common complaint Mac users have about Firefox is that it just doesn’t feel like a native OS X application. This is a valid critisism, mostly because… Firefox isn’t a native application. Firefox abstracts away a lot of the OS-specific stuff like dialogs, context menus, and “widgets” like buttons and dropdowns in order to be more portable across platforms.

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