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Commentary

SAP Calls Nucleus Report 'Junk Science'

Since we got our hands on a Nucleus Research report that claims SAP customers are 20% less profitable than their peers, we've had a chance to talk to SAP about it. "Their research is like comparing apples to rotten oranges," says SAP spokesperson Bill Wohl. "They [analyzed] 1/25th of a percent of SAP customers--81 out of 30K, and from that small slice they've concluded that SAP customers are less profitable."
Since we got our hands on a Nucleus Research report that claims SAP customers are 20% less profitable than their peers, we've had a chance to talk to SAP about it. "Their research is like comparing apples to rotten oranges," says SAP spokesperson Bill Wohl. "They [analyzed] 1/25th of a percent of SAP customers--81 out of 30K, and from that small slice they've concluded that SAP customers are less profitable."Nucleus called into question SAP's marketing campaign about the best-run businesses running SAP in its report. Nucleus analysts assessed the return on equity (ROE) of 81 publicly traded companies on SAP's Web site and found that SAP customers had an average ROE of 12.6% compared with an industry average ROE of 15.7%. The study was not commissioned by an SAP competitor or any other vendor, Nucleus said.

"This is an attempt to give Nucleus visibility by throwing pot shots at software vendors," says Wohl, who argues that SAP doesn't mind criticism from experts who know the software market inside and out. He puts analysts from Gartner, AMR, and others in that camp. "Nucleus' sample size is ludicrous. This is junk science."

SAP's claim that the "best-run businesses run SAP" was based on an analysis of all the companies listed on the NASDAQ and NYSE and a comparison between those that run SAP and those that don't. "This is statistically relevant research," Wohl says.

The relationship between vendors and analysts has always created a fair amount of tension. But I'd say the tension between SAP and Nucleus has reached a new high.

Watch the video report.