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16 Feb 2021
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Welcome to the bundle. CFO meetings feedback.
SAP SE (SAP:ETR) | 0 0 0.0%
- Published:
16 Feb 2021 -
Author:
Slowinski Stefan SS | Castillo-Bernaus Ben BC -
Pages:
18
We''ve got fun and games
Today, we will host a series of SAP ''Bull vs Bear'' debates where we will host small group investor meetings to discuss the SAP investment case. We expect the debate to be spirited. We recently hosted investor meetings with SAP CFO Luka Mucic and new Head of Customer Success, Scott Russell, and nearly 100% of the questions focussed on SAP''s new ''RISE'' offering. SAP believes RISE will accelerate its customers'' shift to S4/HANA Cloud, with significant business model implications for SAP with license and maintenance revenues falling, and cloud accelerating.
SAP can get you everything you want. They can help you find whatever you may need
SAP claims its RISE offering is a ''concierge service'' which will provide customers with tools to 1) map their existing ERP estate through a new SAP SaaS offering (Business Process Intelligence through Signavio), 2) automate their move to a clean core ERP in the cloud, 3) identify the best hyperscale infrastructure option, and 4) provide migration services in three ''T shirt sizes''.
Welcome to the SAP (Prime) bundle
We see RISE as a bundle offering from SAP that not only includes subscriptions for S4/HANA and hyperscale infrastructure but is also a ''Trojan horse'' offering that includes usage of SAP''s Business Technology Platform (PaaS), including the HANA database and intelligent RPA, along with access points to SAP Business Networks such as Ariba and the Digital Supply Chain. By bundling offerings, and incentivising usage, SAP hopes to drive Pay As You Go revenues, create an ecosystem of developers and partners, and make SAP even more strategically relevant.
We take it day by day. Maintain Neutral. Raise target price on valuation roll forward
We remain Neutral rated. While we believe a soft comp, and the initial slow uptake of RISE could create a license beat in Q1, cloud revenues will likely remain weak with transaction based cloud products still under pressure. Our Exane BNPP EPS...