Enterprise applications vendor SAP reported Wednesday strong third-quarter financial results highlighted by record revenue, a seventh consecutive quarter of double-digit growth, and a double-digit gain in market share against rival Oracle.

"We're growing 10 percentage points faster than our nearest competitor, even with an applications software business that is two-and-a-half times bigger," said SAP co-CEO Bill McDermott.

SAP reported revenue for the three months ended September 30 of 3.41 billion Euros ($4.71 billion), up 12% from the same quarter in 2010. Software revenue, the key gauge of growth for any software vendor, was 841 million Euros ($1.16 billion), up 28% in constant currencies, a new third-quarter record for the company. By comparison, Oracle last month reported a 17% increase in new software license sales for its latest quarter ended August 31.

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SAP said sales of its core ERP suite were up 26% and business analytics products (anchored by SAP BusinessObjects software and performance management applications) were up 35%, but it attributed the strong overall performance to the halo effect of its Hana in-memory appliance, enterprise mobility products, and emerging cloud-computing offerings.

"Seven quarters ago we decided on an innovation strategy, and we can say today that it was the right strategy and that we're executing well," said co-CEO Jim Hagemann Snabe.

The Hana appliance, in particular, was the focus of attention during calls with financial analysts and journalists. McDermott said the technology would easily meet its first-year goal of generating 100 million Euros ($138 million) in revenue and that the forward-looking annual sales pipeline is now 600 million Euros ($829 million).

In 2012 SAP will offer customers a next step for Hana, migrating SAP Business Warehouse deployments onto the in-memory technology as a replacement for underlying relational databases such as Oracle's.

SAP's profitability improved markedly in the third quarter, boosted by a judge's decision to reduce damages awarded to Oracle in the TomorrowNow copyright infringement court case from $1.3 billion to $272 million. That led SAP to reduce its provisions for that suit by 723 million Euros (about $1 billion). As a result, operating profit increased 146% to 1.76 billion Euros ($2.43 billion).

Despite its strong results, SAP offered a single-digit growth estimate for the fourth quarter and maintained its existing outlook for a 10% to 14% increase in software and software-related service revenue for the full year. That conservatism is tied to ongoing uncertainties about global economic conditions. Nonetheless, SAP executives noted that companies are cash rich and eager to invest in innovation, and they reiterated estimates that the company would come in at the high end of the 10% to 14% growth projection.

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