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In today’s Cloud Wars Minute, I discuss the rapid growth of SAP’s market cap, which has recently surpassed Salesforce’s. This shift emphasizes SAP’s dominant position in the enterprise apps market and its promising future growth prospects.
Highlights
00:37 — Over time, we have seen some amazing changes in the enterprise apps business. SAP, created the category 50-51 years ago and has been a longtime leader as the cloud emerged. A quarter of a century ago, Salesforce became a major disrupter. Meanwhile, SAP’s market cap had languished somewhat.
01:04 — Well, a few things have happened recently. SAP now has become by far the fastest-growing enterprise apps provider. As a reflection, SAP’s market cap over the past year has gone up steadily. And now, in the last couple of days, it has surpassed Salesforce’s.
02:13 — So, SAP’s market cap is $253.2 billion, and Salesforce’s market cap is $248.1 billion. Now, let’s go back one year, mid-July 2023. We had CRM on top with a market cap of $223 billion, while SAP was at $166 billion. So some rough math there says that over the past year, as SAP’s market cap has gone up about 50%, that of Salesforce has gone up about 10%.
Ask Cloud Wars AI Agent about this analysis
02:58 — In the first quarter ended March 31, SAP reported that its Cloud ERP Suite revenue was up 31%; for the company overall, revenue was up 24%. For Salesforce in its most recent quarter, growth for its apps was about 11%, maybe 12%. So overall, SAP’s apps growth was two and a half times higher than that for Salesforce.
03: 51 — If you look at the AI revolution, which is all about data, which company has the best data? SAP, by having applications that cover everything an enterprise does, is able to capture end-to-end data, whereas Salesforce, in its steadfast position in just the CRM slice of the world, will only be able to generate CRM data for its customers.
04:43 — Salesforce is a terrific company. It has made the big switches I’ve talked about a lot, from being a growth company to a margins and profits company. But for now, this is a monumental achievement by SAP to leapfrog Salesforce in market cap.
