SAP and Citrix do well in a tough year for ICT

Two big ICT firms of very different kinds – business software leader SAP and thin client/VDI/virtualisation in general giant Citrix – released their earnings this week, so we thought we’d round up the main bullet points to see if we can get any deeper analysis going on beyond the immediate champagne cork popping and what have you.

The one that most people will zero in on is of course, SAP. It’s been a tough few months for the company with management changes and an embarrassing court case or two; how is the enterprise software giant faring?

Well, when the results statement leads off with a quote like this from its co-CEO – "back to being a growth company" – you can be sure the numbers will be stronger than you might have expected on that basis. Thus we see that SAP’s fourth quarter software sales went up an impressive 35%, to €1.5bn and total revenue of €4.058bn, up a massive 27% from the same period of 2009.

In the fourth quarter, the company closed contracts with firms ranging from Nottinghamshire County Council, Telefonica Group and China National Chemical Corporation, among others.

But that court case can’t be escaped, sadly. SAP has had to warn the markets that the fine will severely impact its profitability: "SAP has great respect for the US legal system and Court decisions. However, [we] believe that the amount awarded by the jury in Oracle v. SAP/TomorrowNow is disproportionate and wrong…"

It will appeal, basically, but has had to put the money aside to pay the full jury award of $1.27bn. So it looks like that one hasn’t run its course and could even go to a new trial, it warns.

In practical terms, that equates to a fall of a painful 36% in income – from €682m to €437m as SAP had to increase its provision. Still, SAP is confident about its immediate future, arguing "[it] fundamentally believes in innovation and choice as a sustainable business model for us and our customers," said Jim Hagemann Snabe, Co-CEO of SAP.

"We have a full pipeline of innovations and are expanding into new markets for mobility, on demand and in-memory computing. We are convinced that these new innovations will help us drive double digit growth and reach one billion users by 2015," he added.

More specifically, the Walldorf giant expects its software and services revenue to increase 10 to 14% during 2011, with operating profit will be between €4.45bn and €4.65bn.

Citrix had a very good year too, seeing revenue jump from last FY’s $1.61bn to this year’s $1.87bn, a 16% hike. It had a particularly strong Q4, with a 17% jump in sales, from $451m to $530m. For the year, it showed net profit of $277m, well up on 2009’s $191m.

Its CEO Mark Templeton claimed the figures showed "stronger market leadership positions in Desktop Virtualisation, Web Collaboration and App Networking" as the company works to gain "significant strategic visibility in the IT executive suite": "Our customers are telling us they want to simplify enterprise computing, they want to embrace IT consumerisation, and they are ready to adopt more cloud services – all to transform IT to an on-demand service. These three powerful market forces are driving a need for Citrix virtual infrastructure and making our platform more relevant and strategic."

Thus two linchpin companies have done well in a tough year – suggesting promising hints of growth for others? We’ll have to see.

Type: White Paper


  • Favorite list is empty.
FavoriteLoadingClear favorites

Your favorite posts saved to your browsers cookies. If you clear cookies also favorite posts will be deleted.