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SAP CEO Leo Apotheker, commenting on this morning's second-quarter earnings report, said that he was "excited about the new products that we are delivering to our customers, solutions that provide them more transparency and clarity into their businesses, which are especially crucial in times like these."
Remind you of anything? I'm thinking of how IBM is buying SPSS (Nasdaq: SPSS ) in order to boost its predictive powers. SAP is a player in the data mining sector where SPSS makes its bread, as is archrival Oracle (Nasdaq: ORCL ) , alongside a host of smaller operations.
Are Apotheker's musings a sign of the business intelligence and analysis market rising to prominence right now?
SAP's own business could sure use a catalyst of some sort right now -- sales in constant currencies fell 14% year-over-year to $3.6 billion, worse than Oracle's 5.5% decline or IBM's 13% fall over their closest comparable periods. Adjusted earnings per share fell 2% year over year, comparable to Oracle's performance but far behind Big Blue. The German enterprise software giant has about $4.8 billion of liquid assets on hand, so a sizable acquisition wouldn't be out of order.
Among the potentially available small-cap business intelligence specialists that could keep SAP apace with IBM's buyout-hungry ways, a couple of names deserve at least a passing glance:
- SPSS rival Fair Isaac (NYSE: FIC ) would raise SAP's public profile in North America, but the company's narrow financial focus may be too niche for SAP.
- Teradata (NYSE: TDC ) might be a more logical target for SAP, thanks to a wider range of products in the fields of data storage, information management, and deep analysis. But it's not the bite-sized tidbit that Fair Isaac is, and is too big for SAP to buy out of its own wallet.
- But TIBCO Software (Nasdaq: TIBX ) looks like the best of both worlds. The company is small enough to be affordable, yet innovative enough to provide SAP with a real edge on the business information battlefield. And if SAP won't bite, maybe Larry Ellison will. Even the Switzerland of enterprise computing must have a price.
Mergers and acquisitions are all the rage right now, and it would behoove SAP to get in while the getting is good. Ready to spend some Euros to make some Euros, Mr. Apotheker?