German business software group SAP AG fell short of some expectations for a sales of a new database product called Hana, raising concerns about the success of the product and sending SAP shares down against the sector trend.
Although the world’s biggest maker of business software said it saw strong momentum for its main products, including Hana and its mobile software unit, and kept its full-year outlook, its shares lagged a rise in the technology sector as a whole.
The company and its investors have high hopes Hana will snatch market share from main competitor Oracle Corp, but Hana and the mobile software unit – a n other area which SAP sees as potentially key in future – only fetched 49 million euros ($64.7 million) in sales in the first quarter.
“SAP Hana and mobile (was) a notch lighter than anticipated by us,” said DZ Bank analyst Oliver Finger. Mirko Maier, analyst at Landesbank Baden-Wuerttemberg, said he had anticipated a figure of 108 million euros.
SAP stock slipped 1 percent by 0840 GMT, making it the only decliner in the STOXX Europe 600 technology index, which was up 1.3 per cent after strong results from Apple.
Hana came to market last year and generated 160 million euros in sales through the end of 2011, surpassing SAP’s own expectations of 100 million.
SAP wants to double revenue from the product to 320 million euros and also wants to double sales from mobile software to 220 million euros.
SAP has packaged the technology with hardware from IBM as a niche product, a business intelligence tool to help companies analyse large quantities of data quickly. Oracle last month launched a similar product dubbed Exalytics.
SAP can deal a blow to Oracle as it is tweaking the technology for Hana so it can be used to store data for business management applications that handle corporate accounting, human resources and procurement software.
At the moment the bulk of these SAP applications run on Oracle database software and the German company is the biggest reseller of that product. But analysts anticipate that if Hana continues its winning streak, it could win acceptance as an alternative to the Oracle database and steal business from its opponent.
SAP, which reported key figures on April 13, said it still expected 2012 operating profit to rise to between 5.05 billion euros and 5.25 billion at constant currencies.
It expects cloud computing firm SuccessFactors, which it bought for $3.4 billion earlier this year, to contribute to an increase in full-year revenue from software and software-related services of between 10 and 12 percent.
For the second quarter, SAP expects software revenue of between 964 million euros and 1 billion, at constant currencies, while it sees software and software-related service revenue at 2.95 to 3.0 billion euros.
Its shares are still up 20 per cent so far this year, outperforming the STOXX Europe 600 Technology index, up 6 per cent.
SAP shares trade at a 12-month forward price-to-earnings ratio of 15.3, compared with 10.9 for Oracle and 10 for French peers Cap Gemini and Atos.
SAP built its business on large, integrated software systems sold to many of the world’s biggest companies, such as Apple , GE, McDonald’s and Pepsi.
SAP also competes with IBM, which said last week its software business – its largest segment – had a strong quarter with revenue of $5.6 billion, up 5 per cent.