The SAP Rating, Bigger Surprise than RIM as Number One in 2009
September 5, 2009
My RSS reader (not yet dead) delivered two stories to me this afternoon. The first carries a Forbes.com tag and the second is a PR Newswire “news” release. The Forbes.com “story” is like stories in Beyond Search, conference speakers for companies with giant exhibits, and blow in white papers in magazines. The idea is to convert readership into money. The SAP story originates from SAP in Waldorf, Germany. The headline is arresting: “SAP Named Highest Ranked Software Company in 2009 Dow Jones Sustainability Indexes.” There is a brief explanation of the index, but the key point is that it applies to or derives from 34 software companies. That’s a modest sample, but I assume these are publicly traded firms. The key passage for me was:
Compared with the 2008 rankings, SAP improved in all three aspects and had sector-leading scores in 12 of the 20 key dimensions, including operational eco-efficiency (where it scored 100 percent), brand management, human capital development, corporate citizenship and codes of conduct. SAP also received a 100 percent rating for its environmental reporting, driven by its innovative and interactive online sustainability report.
My click to the second news item on MSN MoneyCentral revealed that the story here was the same as Forbes’s.
When I thought about this news release, several thoughts crossed my mind:
First, SAP has been the center of a mini tempest with regard to fees. My recollection is that customers are grousing. Perhaps customer satisfaction should be given more weight.
Second, I think the notion of an on premises software system being “sustainable” strikes my as out of step with where newer software companies are going. The “out” is sustainability, which I think means annuity revenue from license and support services. I would define “sustainability” somewhat differently.
Third, the financial whack delivered to publicly traded software companies has been a spur to some companies to find ways to slash costs and boost revenues. If enough bones are chopped away, the structure sags. I wonder if this aspect of SAP’s performance has helped the firm’s rating.
I don’t think of SAP as sustainable. I think of SAP as a company to watch because it manifests traditional approaches to enterprise software. SAP is trying to adapt. To me, the struggle for growth makes SAP interesting.
Stephen Arnold, September 5, 2009
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