RealTime IT News

SAP Software Sees Strong Q3

SAP executives announced Wednesday the company expects software revenues to translate to about $507 million in the third quarter and nearly $2 billion overall.

And despite the sluggish economy, officials said it was U.S. sales that helped the company close with such good numbers. While some deals that should have been sealed in the second quarter but lagged into the third accounted for some of the gains, SAP pointed to closure dates in the U.S. as a factor.

The disclosure comes in the same week that PeopleSoft expressed similar upbeat sentiments. SAP's biggest competitors, Oracle and PeopleSoft , have been embroiled in a takeover struggle the past several months, which might have made sales easier for the German software developer. Industry analysts have repeatedly said that short-terms sales would fall SAP's way because of the uncertainty surrounding Oracle and PeopleSoft.

Byron Miller, an analyst with Forrester Research, said enterprise resource planning (ERP) software has been underpriced for several years now. That SAP can continue to keep its software revenue projections in light of the Oracle/PeopleSoft flap points to a rebound in IT spending.

"When you've got three major vendors, and two of the three are competing heavily, the third one has to as well," Miller said. "I think it's good that we haven't seen the market slide, and if the pressures are as high as what they seem to be it would indicate that there's even more comeback than would be evident otherwise."

SAP doesn't have an outlook for the entire year; a third quarter results announcement is scheduled for Oct. 16.

A spokesperson for the company would not comment on the numbers released Wednesday and said more information would become available at next week's conference call.