Time and again SAP (
SAP
) has announced that its in-memory is a disruptive technology,
which speeds up data storage and retrieval to unprecedented
speeds. Traditionally SAP competes with Oracle (
ORCL
), Microsoft (
MSFT
), Salesforce.com (
CRM
) and IBM (
IBM
) in the applications software market.
We maintain a
$64.85 price estimate for SAP stock
, which is about 15% higher than market price.
Leveraging the in-memory technology is a software known as HANA
(High Performance Analytic Appliance) that SAP released a few
months back. HANA uses a different method of storing and retrieving
data by storing it on computer's CPU rather than traditional way of
reading and writing on storage disks. Can SAP's in-memory become a
disruptive technology and benefit SAP by gaining application
software market share?
SAP Setting High Benchmarks with HANA
In the past, the company has highlighted the prospects of HANA
and mentioned how HANA will help extend its leadership in analytics
software or the Business Intelligence software. We also highlighted
how HANA could help SAP reinforce its leadership in the Business
Intelligence market in our note titled
SAP Widening its Lead in Business Intelligence
.
Recently, SAP and IBM tested HANA's capability of handling a
large number of queries for a huge database. According to the press
release, HANA dramatically outperformed the traditional disk-based
systems such as Oracle. According to another report, SAP is
introducing a number of new applications leveraging its in-memory
technology. These applications will facilitate real-time business
and help its customers make better strategic decisions by
simulating outcomes.
Can SAP Threaten Oracle Through In-Memory?
Oracle is the largest player in the database software market and
a potent competitor to SAP in the applications software market.
However, as discussed above, SAP's in-memory technology has the
potential to threaten Oracle by producing faster transactions. We
believe that Oracle has also made great strides over the last year
or so through the introduction of faster Exadata machines capable
of producing millions of transactions quickly. With superior
performance, SAP would gain market share at Oracle's expense, a
topic we discussed in a note titled
Oracle's Exadata & Software Give Oracle 20%
Upside.