The strongest growth came from SAP NetWeaver and other related products, which increased 258 percent to $51.5 million.
SAP said profits rose 15 percent as more U.S. orders helped it take market share from Oracle. SAP's software revenue grew 20 percent to $707 million globally from the year-ago quarter. The U.S. contributed with an increase of 34 percent to $238 million. “The third quarter marked another strong performance for SAP,” said Henning Kagermann, CEO of SAP, in a statement. “We had record third-quarter software revenues, we gained share against our peer group, and we extended our lead in the U.S.”
SAP has raised its software revenue outlook for 2005, and now expects an increase between 12 percent and 14 percent, compared to previously stated expectations of an increase between 10 percent and 12 percent.
SAP is the market leader in enterprise applications, but its closest rival Oracle Corp. has set its sites on dominating the market. To do this, Oracle has focused on acquisitions, spending about $18 billion in 2005. Its acquisition binge this year has seen it buy-up companies such as PeopleSoft, which had recently acquired J.D. Edwards, followed by retail specialist Retek, and then customer relationship management software maker Siebel Systems for $5.85 billion.
Since Oracle’s string of acquisitions, SAP countered with its Safe Passage program, launched in January, designed to lure Oracle customers. This week, SAP extended the Safe Passage program to Siebel Systems customers. Since the launch, SAP has lured about 30 Oracle customers to its side.
SAP reported growth in all product areas with the exception of PLM, which slid from $47.9 million to $41.9 million. Customer relationship management (CRM) software revenue increased 41 percent in the third quarter of 2005 and the company continued to gain share against its rivals such as Oracle. At $176 million, CRM represented 25 percent of SAP's total software revenues.
Enterprise resource planning (ERP) software revenue increased 11 percent to $358.5 million and represented 39 percent of total software revenues. Supply chain management software revenue rose two percent to $117.5 and represented 17 percent of total software revenues.