SAP (
SAP
) stills holds the number one position in customer relationship
management (
CRM
) software market with an estimated share of around 23%. However
this has declined gradually due to increased Software As a Service
(SaaS) offerings from companies like Microsoft (
MSFT
), Salesforce.com (
CRM
) and Oracle (
ORCL
) .
While we expect SAP's share to decline to 18% by 2017, the
Trefis community predicts flat market share in the 22% to 23%
range, corresponding to an upside of 5% to our price estimate for
SAP's stock.
We currently have a
Trefis price estimate of $57.49 for SAP's stock
, about 15% above the current market price.
Increasing Adoption of SaaS
Companies like Salesforce.com and Microsoft have increased their
SaaS offerings which work on the on-demand principle. With SaaS,
enterprises can license only the amount of software required versus
the traditional way of procuring the license per device. The
service is provided through the Internet and the actual data and IT
infrastructure resides with the host rather than the client. Hence
the client does not need to bear extra cost of infrastructure and
can also start using the solution immediately.
SAP has also been slow in adoption of SAP Business ByDesign, a
SaaS offering.
Positive Results from Oracle's Acquisition of
Siebel
Oracle acquired Siebel in 2006 for its CRM offerings. Oracle
could not immediately benefit from this acquisition due to the time
required for the expected synergies to fall in place and
struggled to increase its market share. We expect that Oracle
would now be in a position to start benefiting from Siebel's
acquisition, adding another threat to SAP's supremacy in the CRM
market.
Trefis Community Forecast
The Trefis community forecasts that SAP's market share in
customer relationship software will remain within a range of 22% to
23% through 2017, compared to the baseline Trefis estimate of a
decrease from 21% to 18% during the same period. The community
estimates imply an additional 5% upside to the Trefis price
estimate for SAP's stock, which is already roughly 15% ahead of
market value.
Our
complete analysis for SAP's stock is here
.