It seems software sales, seen as a key growth driver given their propensity to lead to maintenance and support revenue, particularly in the Americas region, were largely to blame for the shortfall.
The company said that total revenue for the full year 2006 will be about 9.43bn euros, a 12% increase on 2005 when fluctuating currency rates are factored out.
Software revenue will be up around 11%. At constant currency levels, that would be 13.5% growth for the year, compared to the 15% to 17% growth the company was expecting. That’s about 3.1bn euros in license revenue for 2006.
Fourth-quarter performance provided the main drag on the year, mainly due to flat software sales in the Americas region and single-digit growth in Asia.
In the US, fourth-quarter software revenue in the US was up 4%, 15% at constant currencies, compared to 15% and 20% in the third quarter of last year.
In SAP’s native Germany, sales were better than expected, the company said. Japan, too, performed well, the firm said in a statement.
The enterprise software company will report its final results on January 24. Yesterday, it left watchers guessing whether the miss was due to problems specific to SAP’s latest software or broader industry concerns.
The latter explanation could be given weight by the announcement last month from SAP’s main competitor, Oracle, which said that it saw less money from new applications licenses than analysts had been expecting in its most comparable quarter.
Oracle’s second fiscal quarter, which ended November 30, saw Oracle grow new applications license revenue 28% to $340m, about $41m less than Wall Street had been on average expecting.
SAP’s news had an impact on Oracle too. When the shortfall was announced a half hour before market close, Oracle’s shares proceeded to slide over 2%.
The German company’s silver lining was its 2006 global market share gains, which it put at 3 percentage points for the year, based on its own estimation of the size of the Core Enterprise Applications market – a 24.2% slice of a $16.4bn pie.
