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Oracle falls short of expectations – SAP wants to crack down harder

Although the SAP competitor Oracle had a strong cloud business in the past quarter, sales and earnings are falling. And this more clearly than expected by analysts. The reason is quickly found. On the other hand, SAP wants to solve its problems faster and focus more on its customers.

The most important things about Oracle and SAP in advance:

  • Oracle with weak software business in the past quarter
  • SAP is rearranging itself with a greater customer focus

The fourth quarter, which ended at the end of May, brought Oracle a drop in sales and earnings. The US software company also failed to meet analysts’ expectations. The software sector in particular weakened.

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Oracle said revenue in the past three-month period decreased approximately six percent from the fourth quarter of 2019 to $ 10.4 billion. Analysts (FactSet) had expected an average revenue of $ 10.63 billion.

According to Oracle, net profit fell 17 percent to $ 3.1 billion. The analysts’ forecasts were also missed here. The group referred to the Corona crisis and its impact on business. In the software business in particular, a weakening demand was felt. The cloud division, on the other hand, has grown again, according to the SAP competitor.

SAP was also not satisfied with its recent business development and had also initiated personnel changes a few weeks ago. Christian Klein is now managing the company on his own; double leadership with Jennifer Morgan has been abandoned. Klein now has the task of better integrating the numerous companies that have been acquired in recent years into the company. In the past, they worked comparatively independently.

Products on SAP

Chairman of the supervisory board, Plattner, also called for a greater focus on customer needs. The strategy also had to be adjusted, according to Plattner. From a technological point of view, the right decision was ultimately not made, which caused SAP to be thrown back. Oracle and SAP stock prices both suffered in the Corona crisis. With an increase of 3 percent since the beginning of the year, Oracle has performed slightly better than SAP, which has not changed since the beginning of the year.

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Source: HSBC

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