Salesforce catching up to SAP? Not so quickly, perhaps

Tom Paine

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With all the hype given to Salesforce, with which on substance I certainly to a degree buy in to, there's been much talk (led by Marc Benioff himself) about the inevitability of Salesforce 'catching up' to SAP one of these days. But in the past few months the stock market results haven't reflected a closing of the gap. Quite the opposite.

I looked at SAP (NYSE: SAP) and Salesforce (NYSE: CRM) share prices from the day Dreamforce ended (9/18) up through the close of business Friday,December 4. Of course, the other significant financial event during that period was its earnings report on November 18.

SAP reported preliminary results on October 12 that exceeded estimates, also offering a bouyant outlook for Q4.

Of course, Salesforce is growing at a much faster rate, but for SAP even the slightest upward blip could make a big difference. SAP also touts its cloud growrh, although cloud revenue still accounts for a relatively small percentage of
overall revevue, and it was cacquired mostly through pricey acquisitions and the payback on these remain to be determined.

Salesforce now has a market capitalization of $54.5 billion, up from $47.1 billion at the end of Dreamforce, versus $96.4 billion for SAP, up from $77.6 billion at the end of Dreamforce.

	Salesforce	SAP
9/18	$71.40	$64.96
12/4	$82.13	$78.98
% change	15 %	21.6 %