SAP: Will The String Of Launches At SAPinsider Drive Growth?

Germany-based software developer SAP SE (DE:SAPG) (TO:SAP) is keeping busy with a string of launches at the SAPinsider, a conference organized by the company and its partners, in Vienna from Jun 20–22, 2016.

The company rolled out a number of products, namely, SAP Cloud Identity Access Governance, SAP HANA smart data integration, SAP HANA smart data quality, SAP Data Services, SAP Information Steward software and the SAP Agile Data Preparation application, that will bolster its cloud portfolio.

The Offerings

SAP Cloud Identity Access Governance has been engineered to address the growing demand for identity as a service (IDaaS). Powered by the SAP HANA Cloud Platform, SAP Cloud Identity Access Governance will help organizations manage identities and optimize compliance processes. The company also declared it as the first offering in the new range of cloud services with a few more scheduled for launch. This one will particularly simplify access governance, allowing customers to speedily assess and counter risks to ensure compliance.

SAP HANA smart data integration and SAP HANA smart data quality on the other hand has been built to allow organizations govern Big Data seamlessly, leveraging on the competence of cloud platforms for information storage and cost reduction. Similarly, SAP Data Services has additional features that can assist customers in shifting their on-premise data to cloud platforms such as Microsoft (NASDAQ:MSFT) Azure, Amazon (NASDAQ:AMZN) S3 and Google (NASDAQ:GOOGL) Cloud Storage. This in turn will bolster Big Data analytics and support disaster recovery.

Furthermore, the newly launched SAP Information Steward will help in perfecting Hadoop data analysis. Also, the SAP Agile Data Preparation is created to accentuate self-service capabilities of clients by helping them access, transform and combine data, thereby reducing time and complexity of the analysis.

Prospects Bleak

Despite the product launches and the cloud business strength, SAP’s prospects lack sheen. The bearish outlook issued by the brokers was reflected in the downward revision of projected earnings for 2016, which fell from $3.70 to $3.52 in the past 30 days. A host of factors like stiff competition in the IT services industry, persistent weakness in multiple end-markets like Latin America and Brazil along with escalating research and development expenses are posing significant headwinds.

In addition, inherent seasonality in technology spending has largely hurt this Zacks Rank #4 (Sell) company’s software revenues and may continue to do so in the quarter to-be-reported.

Better-ranked stocks in the industry include CommVault Systems, Inc. (NASDAQ:CVLT) , CounterPath Corporation (NASDAQ:CPAH) and ACI Worldwide, Inc. (NASDAQ:ACIW) . While CommVault Systems sports a Zacks Rank #1 (Strong Buy), CounterPath and ACI Worldwide hold a Zacks Rank #2 (Buy).