Professional Documents
Culture Documents
77.98
65.82
Trefis Estimate
Market Price
RESOURCE PLANNING
SOFTWARE
PROFESSIONAL SERVICES
Consulting Revenue 22
Training & Other Revenue 23
VALUATION HIGHLIGHTS
CONTENT@TREFIS.COM
Below are key drivers of SAP's value that present opportunities for upside or
downside to the current Trefis price estimate for SAP:
Enterprise Software
SAP ERP Market Share: We estimate that SAP share in Enterprise
Resource Planning (ERP) software market has declined from around
26.8% in 2008 to around 24% in 2014. We expect it to remain almost
stable over our forecast period, as the increased integration of HANA
may be offset by heavy competition in the cloud segment. If SAP
manages to capture 35% of the market by the end of the forecast period,
there could be a 16% upside to its price estimate.
SAP CRM Market Share: We estimate that SAP share in Customer
Relationship Management (CRM) software has declined from around
22.5% in 2008 to 12% in 2014. We expect that SAP will benefit from the
excellent off-take of HANA and integration of the platform and SAP's
applications.
However, SAP faces stiff competition from Salesforce.com, Oracle and
Microsoft in this market. Pure cloud computing players like
Salesforce.com have an advantage over SAP as it can benefit from the
expected fast growth of cloud computing market. Also, Oracle has
claimed that it is gaining applications market share from SAP. We
believe that the benefits from SAP Hana will be offset by market share
gains by its competitors. Consequently, we expect SAP's market share to
decline to 8.7% by the end of Trefis forecast period.
For additional details, select a driver above or select a division from the
interactive Trefis split for SAP at the top of the page.
SOURCES OF VALUE
The ERP software segment is SAP's most valuable segment for the following
reasons:
High Market Share in Large ERP Market
SAP remains the leader in the ERP market with a market share of around
24% in 2014. We believe that SAP's ERP market share will decline marginally
by the end of the Trefis forecast period due to heavy competition and low
barriers to entry in the cloud segment.
On the flipside, we believe SAP may lose market share in future due to
Better innovative efforts taken by its competitors.
Increasing presence of its competitors across the globe.
CONTENT@TREFIS.COM
CONTENT@TREFIS.COM
SAP Market Share in Resource Planning Software represents the percentage of the global Enterprise Resource Planning
(ERP) market (in terms of new software license sales) attributable to sales by SAP.
ERP software is used for integrating the data and processes of an organization into one single system.
SAP's primary competitors within ERP include Oracle, Infor, Sage and Microsoft.
25
20
15
10
5
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
With around 24% market share, SAP is a clear market leader in the ERP space. However, the company has recently
experienced declines in its ERP Market share. SAP's market share has decreased from around 27% in 2008 to 24% in 2014.
Trefis forecasts that SAP Market Share in Resource Planning Software will remain around the 24% level because
increasing integration of ERP software with HANA will be offset by higher competition in the cloud industry.
Forecast Rationale
1. THREAT FROM SMALLER PLAYERS Infor and Sage are two small players in the ERP market, but they have shown
tremendous growth of late . Infor has taken several innovative steps to increase its share, one such example being its
recent announcement of OpenSOA. It is a mechanism by which it becomes easy for customers to self-configure and
integrate different systems without the vendors intervention. This reduces cost and instantly and seamlessly adds
tremendous value to the business. Sage's strongest areas of specialization are in healthcare, payment processing and
online banking--a sector that has seen increasing need for such solutions.
CONTENT@TREFIS.COM
2. ORACLE'S INCREASING PRESENCE IN THE FINANCIAL SERVICES AND PUBLIC SECTOR Oracle's acquisition of
PeopleSoft in 2005 catapulted Oracle to the second spot behind SAP. Oracle has increased its presence in Europe,
with increasing support for the financial services and public sector. It has also taken a greater interest in Human
Resources Management Software.
Sources for historical data and explanations can be found on the Trefis.com website (link)
RESOURCE PLANNING SOFTWARE MARKET
Resource Planning Software Market represents the global Enterprise Resource Planning (ERP) market in terms of new
software license sales.
ERP software is used for integrating the data and processes of an organization into one single system.
40
30
20
10
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Resource Planning Software Market has increased from $21.4 billion in 2008 to $27 billion by 2013. Trefis forecasts that
Resource Planning Software Market will continue to increase at a moderate rate and reach $44 billion by 2021.
Forecast Rationale
1. ON-GOING NEED FOR BUSINESS PROCESSES AND SYSTEMS DATA INTEGRATION DRIVING THE ERP MARKET There is an
ever increasing need for companies to automate and integrate various business processes and system data. This need is
derived in turn from the need to cut costs and increase efficiency and customer satisfaction. Large companies have
adopted ERP to a large extent, but the Small and Medium Businesses are yet to adopt it and benefit from it. Hence
SMBs segment remain largely unpenetrated and are potential customers for ERP vendors.
2. SECTORS LIKE FINANCIAL SERVICES AND HEALTHCARE TO BE THE DRIVING INDUSTRIES FOR ERP Large financial
organizations like JP Morgan and Bank of America rely on ERP software to track customer information in order to
more effectively sell new financial products. For example, Bank of America can use information about a customer's
credit card history as well as information about their financial status gleaned from savings and checking accounts to
offer the customer new financial products that they are likely to find attractive. Demand for SAP's ERP software
within the healthcare segment is increasing due to the volume of patient data being generated from the on-going
digital transformation of health records. SAP's ERP software will help hospitals, clinics and private practices to
CONTENT@TREFIS.COM
better manage their patient records and therefore reduce costs associated with storing, tracking and duplicating paper
records.
3. ERP SOFTWARE AS A SERVICE COULD SHOW TREMENDOUS GROWTH Software as a Service is a subscription-based
service where companies can access a software online and pay only for the functionality required. This is clearly a cost
effective solution for companies, and suits small and medium enterprises more as they have low IT budgets.
4. EMERGENCE OF OPEN SOURCE ERP implementations are quite complex in nature and generally require a lot of
customization at the client site, as the standard ERP package does not suffice all the needs of the client. With the
emergence of open source, clients IT team can own and customize the software's source code as per their
requirements. It provides them with a great deal of flexibility at a lower initial cost. The only drawback of this is that
the software maintenance and upgrade patches that ERP vendors provide may not work perfectly with the
customized code and could create costly complexities.
Sources for historical data and explanations can be found on the Trefis.com website (link)
RESOURCE PLANNING SOFTWARE GROSS PROFIT MARGIN
Gross Margin represents Gross Profit as a percentage of Revenue. Gross Profit is determined as Revenue minus Cost of
Goods and Services Sold.
80
70
60
50
40
30
20
10
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
The Resource Planning Software Gross Profit Margin increased from 79.4% in 2008 to 81.4% in 2013, but declined to
80.5% in 2014 due to strengthening of the dollar against the Euro.
Trefis forecasts that Resource Planning Software Gross Profit Margin will remain nearly stable over the forecast
period.
Forecast Rationale
1. INCREASING MIX OF MAINTENANCE REVENUES WILL PUSH MARGINS UP Software Maintenance and Support is a high
margin business, with a margin in excess of 90%. We believe the revenues from Software Maintenance and Support
as a proportion of total revenues will increase as SAP increases its customer base. The increase in customer base will
mean constant increase in maintenance revenue even though revenue from new licenses may decline.
CONTENT@TREFIS.COM
2011
9.53
2012
9.46
2013
9.45
2014 2015
9.79 10.8
2016 2017
11.7 12.5
2018
13.8
64.2
63.7
64.6
66.2
64.4
64.1
64.6
63.3
63.1
63.0
64.2
35.8
1.14
n/a
8.39
n/a
36.3
1.17
n/a
8.29
n/a
35.4
1.14
n/a
8.31
n/a
33.8
1.26
n/a
8.53
n/a
35.6
1.38
n/a
9.41
9.41
35.9
1.50
n/a
10.2
10.2
35.4
1.62
n/a
10.9
10.9
36.7
1.75
n/a
12.1
12.1
36.9
1.85
n/a
13.0
13.0
37.0
1.95
n/a
13.8
13.8
35.8
2.04
n/a
14.3
14.3
In addition, you can see the detailed P&L for the Resource Planning Software business in the Appendix (link)
SAP Market Share in Supply Chain Software represents the percentage of Global SCM software license revenue sales by
SAP.
Supply Chain Management or SCM is software which helps companies in the movement and storage of raw
materials, work-in-process inventory, and finished goods from point of origin to point of consumption.
Its primary competitors include Oracle, Infor, and i2 Technologies.
CONTENT@TREFIS.COM
30
25
20
15
10
5
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
SAP is the market leader in the SCM space, with around 26% market share. SAP Market Share in Supply Chain
Software has increased from 21.8% in 2008 to 25.7% in 2014. Trefis forecasts that SAP Market Share in Supply Chain
Software will increase gradually throughout the forecast period, primarily because of the increasing integration of ERP
software with HANA and shift towards cloud deployments instead of on-premise offerings.
Forecast Rationale
1. COMPLETE DEVELOPMENT ON THE SOA PLATFORM SAP underscores its leadership in the SCM market with its
vision for enterprise SOA. Service Oriented Architecture or SOA is a platform which enables developers to reuse the
code and combine resources in a single suite to make it easy for companies to manage their applications. The
advantage of SOA is that if a business rule is changed, it will have to be changed at one place and that change will be
reflected across all software components throughout the company. Hence no need to rewrite different applications.
This help companies in tremendous cost savings. For example, when a company acquires another company, it will be
much easier for the parent company to integrate the data and software components of the acquired company into its
own systems if both companies' systems are built on SOA. SAP's competitors haven't completely ported their
applications to SOA, and hence lag behind SAP.
Sources for historical data and explanations can be found on the Trefis.com website (link)
SUPPLY CHAIN MANAGEMENT SOFTWARE MARKET
Supply Chain Management Software Market represents the Global SCM software license revenue sales.
Supply Chain Management or SCM is software which helps companies in the movement and storage of raw
materials, work-in-process inventory, and finished goods from point of origin to point of consumption.
CONTENT@TREFIS.COM
20.0
17.5
15.0
12.5
10.0
7.5
5.0
2.5
0.0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Supply Chain Management Software Market has increased from $6.16 billion in 2008 to $9.8 billion by 2014. Trefis
forecasts that Supply Chain Management Software Market will increase at a moderate rate and reach $20 billion by 2021.
Forecast Rationale
1. NEED FOR ENTERPRISES TO CUT INPUT COSTS WILL DRIVE THE SCM MARKET There is an increasing need for
enterprises to cut raw material, inventory and storage costs, especially during the recessionary environment . SCM
software helps companies adopt a just-in-time inventory system, which allows them to reduce the amount of
inventory that they keep. It also helps in accurately forecasting demand for their products in the market.
Sources for historical data and explanations can be found on the Trefis.com website (link)
SUPPLY CHAIN SOFTWARE GROSS PROFIT MARGIN
Gross Margin represents Gross Profit as a percentage of Revenue. Gross Profit is determined as Revenue minus Cost of
Goods and Services Sold.
CONTENT@TREFIS.COM
10
80
70
60
50
40
30
20
10
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
The Supply Chain Software Gross Profit Margin increased from 79.4% in 2008 to 81.4% in 2013, but declined to 80.5% in
2014 due to adverse foreign currency movements.
Trefis forecasts that Supply Chain Software Gross Profit Margin will remain mostly stable over the forecast period.
Forecast Rationale
1. INCREASING MIX OF MAINTENANCE REVENUES WILL PUSH MARGINS UP Software Maintenance and Support is a high
margin business, with a margin in excess of 90%. We believe the revenues from Software Maintenance and Support
as a proportion of total revenues will increase as SAP increases its customer base. The increase in customer base will
mean constant increase in maintenance revenue even though revenue from new licenses may decline.
2. INCREASE IN CUSTOMIZATION PROJECTS TO HELP PROFIT MARGINS
SAP has lower margins on standardized software licenses than on custom software projects. Many software
companies have similar margin profiles. SAP and other software companies incorporate custom projects as part of
their strategy to increase customer stickiness .
We foresee an increase in customization projects as clients use more and more complex systems and stand-alone SAP
products are insufficient for their requirements.
3. EXPANDING CUSTOMER BASE TO PRODUCE ECONOMIES OF SCALE As SAP expands its customer base, the input cost
will be divided among a larger base, which will mean that average costs will get reduced. This is the result of
economies of scale, which SAP could experience.
Sources for historical data and explanations can be found on the Trefis.com website (link)
Total Revenue (Bil $)
Supply Chain Software (% of total)
Indirect Expenses (% of total)
Direct Expense (Bil $)
Indirect Expense ($)
Adjusted EBITDA (Bil $)
2011
2.40
64.2
35.8
0.29
n/a
2.12
2012
2.70
63.7
36.3
0.33
n/a
2.37
2013
3.31
64.6
35.4
0.40
n/a
2.91
CONTENT@TREFIS.COM
2014
3.81
66.2
33.8
0.49
n/a
3.32
2015
4.62
64.4
35.6
0.59
n/a
4.03
2016
5.33
64.1
35.9
0.68
n/a
4.65
2017
6.00
64.6
35.4
0.78
n/a
5.23
2018
6.85
63.3
36.7
0.87
n/a
5.98
2019
7.65
63.1
36.9
0.96
n/a
6.69
2020
8.50
63.0
37.0
1.06
n/a
7.45
2021
9.21
64.2
35.8
1.16
n/a
8.06
11
2011
n/a
2012
n/a
2013
n/a
2014 2015
n/a 4.03
2016 2017
4.65 5.23
2018
5.98
In addition, you can see the detailed P&L for the Supply Chain Software business in the Appendix (link)
SAP Business Intelligence Software Market Share represents the percentage of the Global Business Intelligence Software
(BI) market attributable to sales by SAP.
Business Intelligence software helps companies identify where to cut costs and locate growth opportunities.
SAP's primary competitors within Business Intelligence market include Oracle, SAS Institute, IBM and Microsoft.
20
15
10
5
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
SAP Business Intelligence Software Market Share has decreased from around 23.6% in 2008 to 20.8% in 2014, as per our
estimates. We believe that SAP Business Intelligence Software Market Share will decline slightly in the short term due to
high competition, but will cross 21% by the end of the forecast period.
Forecast Rationale
1. SAP SETTING HIGH BENCHMARKS WITH HANA Time and again SAP has announced that its in-memory is a
disruptive technology, which speeds up data storage and retrieval to unprecedented speeds. Leveraging the inmemory technology is a software known as HANA (High Performance Analytic Appliance) that SAP released a few
CONTENT@TREFIS.COM
12
months back. HANA uses a different method of storing and retrieving data by storing it on computers CPU rather
than traditional way of reading and writing on storage disks. HANA has already exceed sales forecasts in 2011,
generating of around 160 million euros. On the other hand, Oracle has also made great strides over the last year or so
through the introduction of faster Exadata machines capable of producing millions of transactions quickly.
2. SAP BUSINESS OBJECTS HAS FASTER DATA PROCESSING SPEEDS SAP's Business Intelligence tool processes data at a
faster speed compared to some of its competitors, such that it can process millions of records within seconds.
3. SAP BUSINESS INTELLIGENCE TOOL HAS INTUITIVE INTERFACE SAP Business Intelligence interface is simple and can
be used by non-technical person in a company.
Sources for historical data and explanations can be found on the Trefis.com website (link)
GLOBAL BUSINESS INTELLIGENCE SOFTWARE MARKET
Global Business Intelligence Software Market represents the Global Business Intelligence (BI) market.
BI software helps companies make better decisions by identifying areas where costs can be minimized and by locating
growth opportunities that can be leveraged.
25
20
15
10
5
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
The value of the Global Business Intelligence Software Market increased from $8.9 billion in 2008 to around $15.1 billion
by 2014. Trefis forecasts that Global Business Intelligence Software Market will continue to increase at a moderate rate in
line with recent years.
Forecast Rationale
1. BUSINESS INTELLIGENCE TOOL IS IMPORTANT FOR COMPANIES LOOKING FOR GROWTH OPPORTUNITIES Companies
generally lack the knowledge to make critical decisions like what product and when should it be launched so as to
maximize its benefits. BI software helps companies make decisions like:. The position of the company with respect to
its competitors. Changes in customer behavior and spending patterns. The capabilities of the company. Market
conditions, future trends, demographic and economic information. The social, regulatory, and political environment.
2.
BUSINESS INTELLIGENCE BECOMES AN EVEN IMPORTANT TOOL DURING RECESSIONARY CONDITIONS During
CONTENT@TREFIS.COM
13
recessionary condition, BI becomes an even important tool for companies to identify areas of cost cutting and have
greater cost efficiencies from their existing processes and resources. It also helps in identifying and mitigating
business risks to the company when the economy is not doing well.
Sources for historical data and explanations can be found on the Trefis.com website (link)
BUSINESS INTELLIGENCE SOFTWARE GROSS PROFIT MARGIN
Gross Margin represents Gross Profit as a percentage of Revenue. Gross Profit is determined as Revenue minus Cost of
Goods and Services Sold.
80
70
60
50
40
30
20
10
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
The Business Intelligence Software Gross Profit Margin increased from 79.4% in 2008 to 81.4% in 2013, but declined to
80.5% in 2014 due to adverse currency movements.
We believe that Business Intelligence Software Gross Profit Margin will remain stable over the forecast period.
Forecast Rationale
1. INCREASING MIX OF MAINTENANCE REVENUES WILL PUSH MARGINS UP Software Maintenance and Support is a high
margin business, with a margin in excess of 90%. We believe the revenues from Software Maintenance and Support
as a proportion of total revenues will increase as SAP increases its customer base. The increase in customer base will
mean constant increase in maintenance revenue even though revenue from new licenses may decline.
2. INCREASE IN CUSTOMIZATION PROJECTS TO HELP PROFIT MARGINS
SAP has lower margins on standardized software licenses than on custom software projects. Many software
companies have similar margin profiles. SAP and other software companies incorporate custom projects
as part of their strategy to increase customer stickiness .
We foresee an increase in customization projects as clients use more and more complex systems and stand-alone SAP
products are insufficient for their requirements.
3. EXPANDING CUSTOMER BASE TO PRODUCE ECONOMIES OF SCALE As SAP expands its customer base, the input cost
will be divided among a larger base, which will mean that average costs will get reduced. This is the result of
economies of scale, which SAP could experience.
CONTENT@TREFIS.COM
14
Sources for historical data and explanations can be found on the Trefis.com website (link)
2011
4.49
35.8
0.54
n/a
3.96
n/a
2012
4.56
2013
4.73
2014 2015
4.75 5.18
2016 2017
5.56 5.92
2018
6.49
63.7
64.6
66.2
64.4
64.1
64.6
63.3
63.1
63.0
64.2
36.3
0.56
n/a
3.99
n/a
35.4
0.57
n/a
4.17
n/a
33.8
0.61
n/a
4.14
n/a
35.6
0.66
n/a
4.52
4.52
35.9
0.71
n/a
4.85
4.85
35.4
0.77
n/a
5.15
5.15
36.7
0.82
n/a
5.67
5.67
36.9
0.89
n/a
6.15
6.15
37.0
0.95
n/a
6.68
6.68
35.8
1.02
n/a
7.09
7.09
In addition, you can see the detailed P&L for the Business Intelligence Software business in the Appendix (link)
SAP Market Share in Customer Relationship Software represents the percentage of Global CRM software license
revenue sales by SAP.
Customer Relationship Management or CRM is software which helps companies acquire and retain customers, and
gain marketing and customer insight.
SAP's primary competitors in this segment include Oracle, Salesforce.com, Microsoft, and Epicor.
15.0
12.5
10.0
7.5
5.0
2.5
0.0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
CONTENT@TREFIS.COM
15
SAP's market share in the global CRM market shrunk from 22.5% in 2008 to 11.9% in 2014 due to greater uptake of ondemand CRM suites over on-premise software. SAP was the market leader in the CRM space in 2008, with around 22%
market share.
Trefis forecasts that SAP Market Share in Customer Relationship Software will decline gradually throughout the
forecast period, primarily because of the stiff competition from Salesforce and Oracle in this segment.
Forecast Rationale
1. THREAT FROM SOFTWARE AS A SERVICE OFFERINGS Players like Salesforce.com and Microsoft have increased SaaS
or Software as a Service offerings, which has seen tremendous growth . SaaS works on the on-demand principle. This
means that enterprises can license only the amount of software required versus the traditional way of procuring the
license per device. The service is provided through the Internet and the actual data and IT infrastructure reside with
the host and not the client. Hence, no expensive infrastructure investments are required from the client's side. The
solution can be run on a PC with an Internet connection and a web browser, while the software and data are stored
on the host servers. Thus, businesses can begin using the solution in no time . Since the entire infrastructure is
maintained by the host, SaaS allows companies to spend less money and effort on managing their IT solutions and
focus on their core competencies instead.
2. SAP'S SLOW DEVELOPMENT OF SAP BUSINESS BYDESIGN TO FURTHER DENT ITS MARKET SHARE SAP has been slow in
implementing its SaaS offering, which it has named Business ByDesign, and released it in 2010. SaaS market is
expected to show much faster growth than the on-premise market.
Sources for historical data and explanations can be found on the Trefis.com website (link)
CUSTOMER RELATIONSHIP SOFTWARE MARKET
Customer Relationship Software Market represents the global Customer Relationship Management (CRM) software
market in terms of new license sales.
CRM is software that helps companies manage customer information in order better acquire and retain customers as
well as gain marketing and customer insight.
60
50
40
30
20
10
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
CONTENT@TREFIS.COM
16
Customer Relationship Software Market has increased from $9.15 billion in 2008 to around $23.5 billion in 2014. Gartner
forecasts that Customer Relationship Software Market will reach close to $37 billion by 2017. Trefis forecasts that
Customer Relationship Software Market will continue to increase at a strong rate and reach $58 billion by 2021.
Forecast Rationale
1. SAAS WILL BE THE MAIN DRIVER FOR THE CRM MARKET Software as a Service (SaaS) is a subscription-based service
where companies can access software online and pay only for the functionality utilized. This is oftentimes a cost
effective solution for companies, and suits small and medium enterprises more, as they have low IT budgets. In this
model, the software is generally hosted on the service provider's servers from where it can be easily accessed by users.
According to a Gartner report, the worldwide SaaS market increased from $6.4 billion in 2008 to $9.2 billion in 2010.
2. ADOPTION OF SOA COULD ALSO BENEFIT THE CRM MARKET SOA or Service Oriented Architecture is a platform
which enables developers to reuse the code and combine resources in a single suite so that it is easy for companies to
manage their applications. The advantage of SOA is that if a business rule is changed, it will have to be changed at
one place and that change will be reflected across all software components throughout the company. Hence no need
to rewrite different applications leading to IT cost savings. For example, when a company acquires another company,
it will be much easier for the parent company to integrate the data and software components of the acquired company
into its own systems if both companies' systems are built on SOA. CRM applications are increasingly built on SOA
architecture.
Sources for historical data and explanations can be found on the Trefis.com website (link)
CUSTOMER RELATIONSHIP SOFTWARE GROSS PROFIT MARGIN
Gross Margin represents Gross Profit as a percentage of Revenue. Gross Profit is determined as Revenue minus Cost of
Goods and Services Sold.
80
70
60
50
40
30
20
10
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
The Customer Relationship Software Gross Profit Margin increased from 79.4% in 2008 to 81.4% in 2013, but declined to
80.5% in 2014 due to adverse currency movements.
CONTENT@TREFIS.COM
17
Trefis forecasts that Customer Relationship Software Gross Profit Margin will remain mostly stable over the forecast
period.
Forecast Rationale
1. INCREASING MIX OF MAINTENANCE REVENUES WILL PUSH MARGINS UP Software Maintenance and Support is a high
margin business, with a margin in excess of 90%. We believe the revenues from Software Maintenance and Support
as a proportion of total revenues will increase as SAP increases its customer base. The increase in customer base will
mean constant increase in maintenance revenue even though revenue from new licenses may decline.
2. INCREASE IN CUSTOMIZATION PROJECTS TO HELP PROFIT MARGINS
SAP has lower margins on standardized software licenses than on custom software projects. Many software
companies have similar margin profiles. SAP and other software companies incorporate custom projects as part of
their strategy to increase customer stickiness .
We foresee an increase in customization projects as clients use more and more complex systems and stand-alone SAP
products are insufficient for their requirements.
3. EXPANDING CUSTOMER BASE TO PRODUCE ECONOMIES OF SCALE As SAP expands its customer base, the input cost
will be divided among a larger base, which will mean that average costs will get reduced. This is the result of
economies of scale, which SAP could experience.
Sources for historical data and explanations can be found on the Trefis.com website (link)
2011
3.62
35.8
432
n/a
3.19
n/a
2012
3.65
2016 2017
5.13 5.57
2018
6.19
63.7
64.6
66.2
64.4
64.1
64.6
63.3
63.1
63.0
64.2
36.3
450
n/a
3.20
n/a
35.4
487
n/a
3.57
n/a
33.8
543
n/a
3.67
n/a
35.6
598
n/a
4.08
4.08
35.9
657
n/a
4.47
4.47
35.4
721
n/a
4.85
4.85
36.7
784
n/a
5.40
5.40
36.9
849
n/a
5.90
5.90
37.0
915
n/a
6.45
6.45
35.8
989
n/a
6.90
6.90
In addition, you can see the detailed P&L for the Customer Relationship Software business in the Appendix (link)
CONTENT@TREFIS.COM
18
Other Software
The most important drivers for the Other Software business are:
Product Lifecycle & Other Software Revenue
Other Non-financial Liabilities (Non-current) as % of Revenue
Produce Lifecycle & Other Gross Profit Margin
PRODUCT LIFECYCLE & OTHER SOFTWARE REVENUE
Product Lifecycle & Other Software Revenue represents the revenues from Product Lifecycle Management and Supplier
Relationship Management products of SAP.
1. Product Lifecycle Management (PLM) - helps in managing the entire lifecycle of a product from its conception,
through design and manufacture, to service and disposal.
2. Supplier Relationship Management (SRM) - helps companies in reducing the procurement costs and better manage
supply bases.
4
3
2
1
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Product Lifecycle & Other Software Revenue has increased from $0.6 billion in 2009 to $2.04 billion by 2014, as per our
estimates. Trefis forecasts that Product Lifecycle & Other Software Revenue will continue to increase at a moderate pace.
Forecast Rationale
1. SAP PLM HAS A COMPLETE SET OF FEATURES SAP PLM provides a complete set of features and applications that
can be used by companies during every phase of product development. It includes:. Idea Management. Product
Portfolio Management. Project Management. Product Manufacturing. Quality Management.
For example, PLM software helps companies embrace a real-time system, wherein workers from different
departments can access a centralized system. This software is typically used by the apparel and footwear industry,
which introduces a lot of products in a short span of time. The different departments are Product development,
Product sourcing and Product quality assurance. SAP's customers that have deployed its PLM software are industry
leaders. These include Siemens, VW, Hella, Tenneco Automotive, BMW, General Mills, Wella, Nestle, Welch
CONTENT@TREFIS.COM
19
Allyn, HP, Smith & Nephew, Volvo Aero, KLM, EADS, Lilly, Bayer, and Henkel.
Sources for historical data and explanations can be found on the Trefis.com website (link)
OTHER NON-FINANCIAL LIABILITIES (NON-CURRENT) AS % OF REVENUE
Other Non-financial Liabilities consist of various employee-related liabilities as well as other taxes such as value-added tax
liabilities and payroll tax liabilities.
2.00
1.75
1.50
1.25
1.00
0.75
0.50
0.25
0.00
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Other Non-financial Liabilities (Non-current) as % of Revenue increased from 0.1% in 2008 to 1.4% in 2014.
We expect this percentage to increase throughout our review period, to reach 2% by 2021..
Forecast Rationale
The forecast for Other Non-financial Liabilities is based on historical trends for the company.
Sources for historical data and explanations can be found on the Trefis.com website (link)
PRODUCE LIFECYCLE & OTHER GROSS PROFIT MARGIN
Gross Margin represents Gross Profit as a percentage of Revenue. Gross Profit is determined as Revenue minus Cost
of Goods and Services Sold.
CONTENT@TREFIS.COM
20
80
70
60
50
40
30
20
10
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
The Produce Lifecycle & Other Gross Profit Margin increased from 79.4% in 2008 to 81.4% in 2013, but declined to 80.5%
in 2014 due to foreign exchange headwinds.
Trefis forecasts that Produce Lifecycle & Other Gross Profit Margin will remain mostly stable over the forecast
period.
Forecast Rationale
1. INCREASING MIX OF MAINTENANCE REVENUES WILL PUSH MARGINS UP Software Maintenance and Support is a high
margin business, with a margin in excess of 90%. We believe the revenues from Software Maintenance and Support
as a proportion of total revenues will increase as SAP increases its customer base. The increase in customer base will
mean constant increase in maintenance revenue even though revenue from new licenses may decline.
2. INCREASE IN CUSTOMIZATION PROJECTS TO HELP PROFIT MARGINS
SAP has lower margins on standardized software licenses than on custom software projects. Many software
companies have similar margin profiles. SAP and other software companies incorporate custom projects as part of
their strategy to increase customer stickiness .
We foresee an increase in customization projects as clients use more and more complex systems and stand-alone SAP
products are insufficient for their requirements.
3. EXPANDING CUSTOMER BASE TO PRODUCE ECONOMIES OF SCALE As SAP expands its customer base, the input cost
will be divided among a larger base, which will mean that average costs will get reduced. This is the result of
economies of scale, which SAP could experience.
Sources for historical data and explanations can be found on the Trefis.com website (link)
2011
4.50
2012
6.18
2013
7.14
2014 2015
3.83 4.18
2016 2017
4.39 4.48
2018
4.70
63.7
64.6
66.2
64.4
64.1
64.6
63.3
63.1
63.0
64.2
36.3
763
35.4
858
33.8
494
35.6
534
35.9
563
35.4
580
36.7
596
36.9
607
37.0
615
35.8
621
CONTENT@TREFIS.COM
21
2011
n/a
3.96
n/a
2012
n/a
5.42
n/a
2013
n/a
6.29
n/a
2014
n/a
3.34
n/a
2015
n/a
3.64
3.64
2016
n/a
3.83
3.83
2017
n/a
3.90
3.90
2018
n/a
4.10
4.10
2019
n/a
4.22
4.22
2020
n/a
4.33
4.33
2021
n/a
4.33
4.33
In addition, you can see the detailed P&L for the Other Software business in the Appendix (link)
Professional Services
The most important drivers for the Professional Services business are:
Consulting Revenue
Training & Other Revenue
Professional Services Gross Profit Margin
CONSULTING REVENUE
Consulting Revenue is the revenue from consulting activities such as requirement gathering, training implementation
partners etc.
3.0
2.5
2.0
1.5
1.0
0.5
0.0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Consulting revenue has dropped from $3.4 billion in 2008 $3.14 billion in 2012. It declined in 2013 to $2.98 billion and
dropped further to $2.5 billion in 2014. The fall in revenue was because of lower consulting revenues associated with cloudbased software and adverse currency movements.
Going forward, we expect it to decline to $2.26 billion by the end of our forecast period, as proportion of cloud
business grows.
Forecast Rationale
CONTENT@TREFIS.COM
22
We expect consulting revenue to decline as SAP enters into new businesses and introduces software in areas such as cloud
based CRM, ERP and social media analytics. These segments have low consulting revenues associated with them as the
bulk of the revenue is derived in the form of subscription charges. Therefore, as the proportion of cloud in SAP's total
revenue grows, we expect consulting revenue to decline in the future.
Sources for historical data and explanations can be found on the Trefis.com website (link)
TRAINING & OTHER REVENUE
Training & Other Revenue represents the revenues from the Education department of SAP.
The segment consists of instructor-led, media-based, and Internet-based training for SAP's software products.
1.25
1.00
0.75
0.50
0.25
0.00
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Training & Other Revenue declined from $0.9 billion in 2008 to $0.7 billion in 2014. However in Euro terms (reporting
currency), the decline was negligible. Trefis forecasts that Training & Other Revenue will increase at a moderate, but
declining rate.
Forecast Rationale
1. SAP CERTIFICATION COURSES ARE IN HIGH DEMAND Companies who have implemented SAP products at their
premises require skilled professionals to manage their SAP application infrastructure. This creates a huge demand for
people having certified knowledge of SAP's suite of products (currently called Business Suite 7).
Sources for historical data and explanations can be found on the Trefis.com website (link)
PROFESSIONAL SERVICES GROSS PROFIT MARGIN
Gross Margin represents Gross Profit as a percentage of Revenue. Gross Profit is determined as Revenue minus Cost of
Goods and Services Sold.
CONTENT@TREFIS.COM
23
20
15
10
5
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
The Professional Services Gross Profit Margin decreased from 26.5% in 2008 to 12.1% in 2014. Trefis forecasts that
Professional Services Gross Profit Margin will decline slightly by the end of our review period.
Forecast Rationale
1. PROFESSIONAL SERVICES SEGMENT TO BE CLUBBED TOGETHER WITH OTHER SERVICES UNDER ONE SERVICE APPROACH
In 2014 fourth quarter results, SAP announced that with effect from the first quarter of 2015, it will club all services,
including cloud subscriptions, under a common umbrella. Consequently, it will no longer distinguish between
consulting services and the premium professional services. This will result in a decline in margins as SAP will no
longer charge higher rates for professional services.
Sources for historical data and explanations can be found on the Trefis.com website (link)
Total Revenue (Bil $)
Consulting Revenue (% of total)
Indirect Expenses (% of total)
Training & Other Revenue (% of
total)
2011
4.69
69.5
13.5
2012
4.42
70.9
11.2
2013
4.22
70.5
9.88
2014
3.43
71.9
7.11
2015
3.34
70.1
6.80
2016
3.31
68.9
5.68
2017
3.38
66.9
5.56
2018
3.52
64.2
6.18
2019
3.64
62.0
6.54
2020
3.77
59.9
7.19
2021
3.86
58.4
7.43
17.0
17.9
19.6
21.0
23.1
25.4
27.5
29.6
31.5
32.9
34.1
3.13
n/a
1.56
n/a
3.23
n/a
1.19
n/a
3.19
n/a
1.04
n/a
2.80
n/a
0.63
n/a
2.78
n/a
0.56
556
2.86
n/a
0.46
456
2.92
n/a
0.46
461
3.00
n/a
0.52
517
3.08
n/a
0.56
564
3.13
n/a
0.64
640
3.16
n/a
0.70
701
CONTENT@TREFIS.COM
24
In addition, you can see the detailed P&L for the Professional Services business in the Appendix (link)
CONTENT@TREFIS.COM
25
Learn More
About Trefis
Trefis.com was founded by MIT engineers and former Wall Street analysts who realized that most people do not
understand the seemingly familiar companies around them including well known companies like Apple, Google, Coca
Cola, GE, Ford and Gap to name a few.
The Trefis platform uses extensive data to show in a single snapshot what drives the value of a company's business.
We move beyond the qualitative notion "if you love the coffee at Dunkin Donuts, you should think about buying the
stock," to answer quantitative questions like "If their coffee sales are up 10% next year but doughnut sales are down 5%,
what happens to the value of the company?"
Trefis analysts spend weeks evaluating each stock that we cover and utilize commonly used valuation methodologies
to determine a Trefis price for each company. We present you with not only our synthesized view but also every single
step within the valuation process used to determine the Trefis price which you can see via our interactive analysis on
Trefis.com.
Learn more about the Trefis story
Read the Trefis FAQ
CONTENT@TREFIS.COM
26
Appendix
2012
31.0
2013
32.9
2014 2015
29.8 32.8
2016 2017
35.4 37.9
2018
41.6
32.6
30.5
28.7
32.8
32.9
33.0
33.1
33.2
33.1
32.9
32.5
8.72
10.1
12.8
14.1
15.1
15.9
16.5
17.1
17.7
18.3
14.7
14.4
15.9
15.8
15.7
15.6
15.6
15.7
15.9
16.1
11.8
12.3
14.1
14.3
14.5
14.7
14.9
15.1
15.3
15.7
12.9
11.5
6.20
12.7
10.2
6.56
12.4
9.36
6.98
11.8
8.92
7.38
11.3
8.47
7.82
10.8
8.14
8.24
10.3
7.84
8.62
9.83
7.66
8.99
36.2
33.9
31.6
36.1
35.9
35.8
35.7
35.7
35.5
35.1
34.6
9.68
11.1
14.0
15.4
16.3
17.1
17.7
18.3
18.9
19.4
16.3
15.8
17.5
17.2
17.1
16.9
16.8
16.9
17.0
17.1
13.1
13.6
15.5
15.5
15.7
15.9
16.0
16.2
16.4
16.7
17.1
6.74
23.2
22.1
4.88
24.5
23.9
3.94
26.3
14.1
2.66
23.6
13.9
2.12
26.2
13.5
1.61
28.4
12.8
1.51
30.5
12.2
1.53
33.7
11.6
1.55
36.5
11.0
1.63
39.4
10.5
1.69
41.4
36.2
33.9
31.6
36.1
35.9
35.8
35.7
35.7
35.5
35.1
34.6
9.68
11.1
14.0
15.4
16.3
17.1
17.7
18.3
18.9
19.4
16.3
15.8
17.5
17.2
17.1
16.9
16.8
16.9
17.0
17.1
13.1
13.6
15.5
15.5
15.7
15.9
16.0
16.2
16.4
16.7
17.1
6.74
n/a
22.1
4.88
n/a
23.9
3.94
n/a
14.1
2.66
n/a
13.9
2.12
n/a
13.5
1.61
n/a
12.8
1.51
n/a
12.2
1.53
n/a
11.6
1.55
n/a
11.0
1.63
n/a
10.5
1.69
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
CONTENT@TREFIS.COM
27
2012
n/a
n/a
2013
n/a
n/a
2014 2015
n/a n/a
n/a 26.2
2016 2017
n/a n/a
28.4 30.5
2018
n/a
33.7
n/a
n/a
n/a
n/a
35.9
35.8
35.7
35.7
35.5
35.1
34.6
n/a
n/a
n/a
15.4
16.3
17.1
17.7
18.3
18.9
19.4
n/a
n/a
n/a
17.2
17.1
16.9
16.8
16.9
17.0
17.1
n/a
n/a
n/a
15.5
15.7
15.9
16.0
16.2
16.4
16.7
n/a
n/a
n/a
n/a
n/a
n/a
13.9
2.12
13.5
1.61
12.8
1.51
12.2
1.53
11.6
1.55
11.0
1.63
10.5
1.69
n/a
n/a
2012
2013
2014 2015
2016 2017
2018
6.03
6.10
6.48
6.95
7.49
8.09
8.74
9.35
9.95
10.5
24.6
24.0
24.0
23.8
23.6
23.5
23.5
23.5
23.6
23.8
24.5
25.4
27.0
29.3
31.7
34.4
37.1
39.7
42.1
44.2
n/a
20.2
43.5
n/a
19.3
42.2
n/a
19.0
42.3
n/a
18.5
42.5
n/a
18.2
42.4
n/a
18.3
42.3
n/a
18.4
42.3
n/a
18.4
42.3
n/a
18.4
42.4
n/a
18.4
42.5
0.13
26.8
4.85
90.5
24.8
4.79
87.5
25.0 25.6
6.00 7.75
92.9 92.0
26.0
9.25
93.3
26.2
10.5
88.8
26.4
11.0
87.4
26.6
11.5
87.1
26.8
11.7
87.3
27.0
12.0
87.5
1.86
2.14
2.54
2.83
3.08
3.43
3.72
4.01
4.31
4.60
22.3
20.1
19.5
21.6
18.5
17.5
19.7
16.2
18.5
20.2
20.0
12.9
13.5
13.4
16.4
17.0
17.2
17.6
18.1
18.6
19.0
19.4
8.77
8.80
9.88
10.8
11.4
12.3
13.0
13.8
14.6
15.4
2.00 2.03
2.21
2.14
2.26
2.30
2.26
2.27
2.28
2.25
2.23
(Current) as % of Revenue
CONTENT@TREFIS.COM
28
1.03
1.46
1.01
2016 2017
2018
1.18
1.33
1.47
1.58
1.71
1.83
1.18
1.16
1.14
1.18
1.20
1.15
1.17
1.19
0.60 0.62
0.69 1.36
1.50
1.55
1.63
1.72
1.82
1.92
2.01
0.29
0.39
0.44
0.48
0.50
0.51
0.52
0.53
9.53
9.46
9.45
9.79
10.8
11.7
12.5
13.8
14.8
15.8
16.4
1.14
1.17
1.14
1.26
1.38
1.50
1.62
1.75
1.85
1.95
2.04
81.4
80.6
81.4
80.5
80.1
80.4
80.6
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
8.39
n/a
8.29
n/a
8.31
n/a
8.53
n/a
9.41
9.41
10.2
10.2
10.9
10.9
12.1
12.1
13.0
13.0
13.8
13.8
14.3
14.3
2011
2012
2013
2014 2015
2016 2017
2018
1.54
1.72
2.14
2.52
2.98
3.41
3.88
4.34
4.83
5.36
5.91
20.0 20.7
23.9
25.7
27.2
28.0
28.5
28.8
29.1
29.2
29.2
7.70
8.33
8.94
9.80
10.9
12.2
13.6
15.0
16.6
18.3
20.2
n/a
19.6
38.4
n/a
20.2
43.5
n/a
19.3
42.2
n/a
19.0
42.3
n/a
18.5
42.5
n/a
18.2
42.4
n/a
18.3
42.3
n/a
18.4
42.3
n/a
18.4
42.3
n/a
18.4
42.4
n/a
18.4
42.5
0.47
0.13
28.2
4.50
83.3
26.8
4.85
90.5
24.8
4.79
87.5
CONTENT@TREFIS.COM
25.0 25.6
6.00 7.75
92.9 92.0
26.0
9.25
93.3
26.2
10.5
88.8
26.4
11.0
87.4
26.6
11.5
87.1
26.8
11.7
87.3
27.0
12.0
87.5
29
2013
2014 2015
2016 2017
2018
2.14
2.54
2.83
3.08
3.43
3.72
4.01
4.31
4.60
22.3
20.1
19.5
21.6
18.5
17.5
19.7
16.2
18.5
20.2
20.0
12.9
13.5
13.4
16.4
17.0
17.2
17.6
18.1
18.6
19.0
19.4
8.77
8.80
9.88
10.8
11.4
12.3
13.0
13.8
14.6
15.4
2.00 2.03
2.21
2.14
2.26
2.30
2.26
2.27
2.28
2.25
2.23
(Current) as % of Revenue
0.43
1.18
1.33
1.47
1.58
1.71
1.83
1.46
1.01
current)
1.03
1.18
1.16
1.14
1.18
1.20
1.15
1.17
1.19
0.60 0.62
0.69 1.36
1.50
1.55
1.63
1.72
1.82
1.92
2.01
0.29
0.39
0.44
0.48
0.50
0.51
0.52
0.53
2.40
2.70
3.31
5.33
6.00 6.85
7.65
8.50
9.21
0.29
0.33
0.68
0.78
0.96 1.06
1.16
81.4
80.6
81.4
80.5
80.1
80.3
80.5
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
2.12
n/a
2.37
n/a
2.91
n/a
3.32
n/a
4.03
4.03
4.65
4.65
5.23
5.23
5.98
5.98
6.69
6.69
7.45
7.45
8.06
8.06
CONTENT@TREFIS.COM
3.81
4.62
0.87
30
2013
2014 2015
2016 2017
2018
3.06
3.15
3.34
3.56
3.82
4.11
4.44
4.81
5.21
23.4
21.8
21.3
20.8
20.6
20.5
20.5
20.6
20.8
21.0
21.3
12.3
13.3
14.4
15.1
16.2
17.4
18.7
20.0 21.4
22.8
24.4
n/a
19.6
38.4
n/a
20.2
43.5
n/a
19.3
42.2
n/a
19.0
42.3
n/a
18.5
42.5
n/a
18.2
42.4
n/a
18.3
42.3
n/a
18.4
42.3
n/a
18.4
42.4
n/a
18.4
42.5
0.47
0.13
28.2
4.50
83.3
26.8
4.85
90.5
24.8
4.79
87.5
25.0 25.6
6.00 7.75
92.9 92.0
26.0
9.25
93.3
26.2
10.5
88.8
26.4
11.0
87.4
26.6
11.5
87.1
26.8
11.7
87.3
27.0
12.0
87.5
1.22
1.86
2.14
2.54
2.83
3.08
3.43
3.72
4.01
4.31
4.60
22.3
20.1
19.5
21.6
18.5
17.5
19.7
16.2
18.5
20.2
20.0
12.9
13.5
13.4
16.4
17.0
17.2
17.6
18.1
18.6
19.0
19.4
8.77
8.80
9.88
10.8
11.4
12.3
13.0
13.8
14.6
15.4
2.00 2.03
2.21
2.14
2.26
2.30
2.26
2.27
2.28
2.25
2.23
(Current) as % of Revenue
n/a
18.4
42.3
0.43
1.18
1.33
1.47
1.58
1.71
1.83
1.46
1.01
current)
1.03
1.18
1.16
1.14
1.18
1.20
1.15
1.17
1.19
0.60 0.62
0.69 1.36
1.50
1.55
1.63
1.72
1.82
1.92
2.01
0.29
0.39
0.44
0.48
0.50
0.51
0.52
0.53
4.49
4.56
4.73
4.75
5.18
5.56
5.92
6.49
7.04
7.63
8.11
0.54
0.56
0.57
0.61
0.66 0.71
0.77
0.82
0.89
0.95
1.02
81.4
80.6
81.4
80.5
80.1
80.3
80.5
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
CONTENT@TREFIS.COM
n/a
n/a
n/a
31
2016 2017
n/a n/a
2018
n/a
4.85
4.85
5.67
5.67
6.15
6.15
3.96
n/a
3.99
n/a
4.17
n/a
4.14
n/a
4.52
4.52
5.15
5.15
6.68
6.68
7.09
7.09
2013
2014 2015
2016 2017
2018
2.62
2.79
3.01
3.28
3.60
3.92
4.26
4.64
5.07
14.5
12.9
12.8
11.9
11.1
10.4
9.86
9.41
9.06 8.81
8.66
16.1
18.0
20.5
23.5
27.2
31.5
36.5
41.6
47.0
52.7
58.5
n/a
19.6
38.4
n/a
20.2
43.5
n/a
19.3
42.2
n/a
19.0
42.3
n/a
18.5
42.5
n/a
18.2
42.4
n/a
18.3
42.3
n/a
18.4
42.3
n/a
18.4
42.3
n/a
18.4
42.4
n/a
18.4
42.5
0.47
0.13
28.2
4.50
83.3
26.8
4.85
90.5
24.8
4.79
87.5
25.0 25.6
6.00 7.75
92.9 92.0
26.0
9.25
93.3
26.2
10.5
88.8
26.4
11.0
87.4
26.6
11.5
87.1
26.8
11.7
87.3
27.0
12.0
87.5
1.22
1.86
2.14
2.54
2.83
3.08
3.43
3.72
4.01
4.31
4.60
22.3
20.1
19.5
21.6
18.5
17.5
19.7
16.2
18.5
20.2
20.0
12.9
13.5
13.4
16.4
17.0
17.2
17.6
18.1
18.6
19.0
19.4
8.77
8.80
9.88
10.8
11.4
12.3
13.0
13.8
14.6
15.4
2.00 2.03
2.21
2.14
2.26
2.30
2.26
2.27
2.28
2.25
2.23
(Current) as % of Revenue
0.43
1.18
1.33
1.47
1.58
1.71
1.83
1.46
1.01
current)
1.03
0.60 0.62
1.18
1.16
1.14
1.18
1.20
1.15
1.17
1.19
0.69 1.36
1.50
1.55
1.63
1.72
1.82
1.92
2.01
CONTENT@TREFIS.COM
32
2016 2017
2018
0.44
0.48
0.50
0.51
0.52
0.53
3.62
3.65
4.06 4.21
4.68
5.13
5.57
6.19
6.75
7.37
7.89
432
450
487
543
598
657
721
784
849
915
989
81.4
80.6
81.4
80.5
80.1
80.3
80.5
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
3.19
n/a
3.20
n/a
3.57
n/a
3.67
n/a
4.08
4.08
4.47
4.47
4.85
4.85
5.40
5.40
5.90
5.90
6.45
6.45
6.90
6.90
2012
2013
2014 2015
2016 2017
2018
2.89
3.94
4.61
2.54
2.69
2.81
2.90
2.98
3.05
3.12
3.18
2.89
3.94
4.61
2.54
2.69
2.81
2.90
2.98
3.05
3.12
3.18
n/a
19.6
38.4
n/a
20.2
43.5
n/a
19.3
42.2
n/a
19.0
42.3
n/a
18.5
42.5
n/a
18.2
42.4
n/a
18.3
42.3
n/a
18.4
42.3
n/a
18.4
42.3
n/a
18.4
42.4
n/a
18.4
42.5
0.47
0.13
28.2
4.50
83.3
26.8
4.85
90.5
24.8
4.79
87.5
25.0 25.6
6.00 7.75
92.9 92.0
26.0
9.25
93.3
26.2
10.5
88.8
26.4
11.0
87.4
26.6
11.5
87.1
26.8
11.7
87.3
27.0
12.0
87.5
1.22
1.86
2.14
2.54
2.83
3.08
3.43
3.72
4.01
4.31
4.60
22.3
20.1
19.5
21.6
18.5
17.5
19.7
16.2
18.5
20.2
20.0
12.9
13.5
13.4
16.4
17.0
17.2
17.6
18.1
18.6
19.0
19.4
8.77
8.80
9.88
10.8
11.4
12.3
13.0
13.8
14.6
15.4
Revenues
Product Lifecycle & Other Software
Revenue (Bil $)
Product Lifecycle & Other
Software Revenue ($ Bil)
Indirect Expenses ($)
R&D as a % of Gross Profit (%)
SG&A as a % of Gross Profit (%)
Stock Comp. as a % of Gross
Profit (%)
Effective Tax Rate (%)
CapEx as a % of Gross Profit (%)
Account Receivable Days (Current)
Other Non-financial Assets
(Current) as % of Revenue
CONTENT@TREFIS.COM
33
2013
2014 2015
2016 2017
2018
2.21
2.14
2.26
2.30
2.26
2.27
2.28
2.25
2.23
0.43
1.18
1.33
1.47
1.58
1.71
1.83
1.46
1.01
current)
1.03
1.18
1.16
1.14
1.18
1.20
1.15
1.17
1.19
0.60 0.62
0.69 1.36
1.50
1.55
1.63
1.72
1.82
1.92
2.01
0.29
0.39
0.44
0.48
0.50
0.51
0.52
0.53
4.50
6.18
7.14
3.83
4.18
4.39
4.48
4.70
4.83
4.95
4.95
538
763
858
494
534
563
580
596
607
615
621
81.4
80.6
81.4
80.5
80.1
80.3
80.5
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
3.96
n/a
5.42
n/a
6.29
n/a
3.34
n/a
3.64
3.64
3.83
3.83
3.90
3.90
4.10
4.10
4.22
4.22
4.33
4.33
4.33
4.33
2011
2012
2013
2014 2015
2016 2017
2018
3.26
3.26
n/a
19.6
38.4
3.14
3.14
n/a
20.2
43.5
2.98
2.98
n/a
19.3
42.2
2.46
2.46
n/a
19.0
42.3
2.28
2.28
n/a
18.2
42.4
2.26
2.26
n/a
18.4
42.3
2.26
2.26
n/a
18.4
42.3
0.47
0.13
28.2
4.50
83.3
26.8
4.85
90.5
24.8
4.79
87.5
25.0 25.6
6.00 7.75
92.9 92.0
26.0
9.25
93.3
26.2
10.5
88.8
26.4
11.0
87.4
26.6
11.5
87.1
26.8
11.7
87.3
27.0
12.0
87.5
1.22
1.86
2.14
2.54
3.08
3.43
3.72
4.01
4.31
4.60
CONTENT@TREFIS.COM
2.34
2.34
n/a
18.5
42.5
2.83
2.26
2.26
n/a
18.3
42.3
2.26
2.26
n/a
18.4
42.4
2.26
2.26
n/a
18.4
42.5
34
2013
19.5
2014 2015
21.6 18.5
2016 2017
17.5 19.7
2018
16.2
13.4
16.4
17.0
17.2
17.6
18.1
18.6
19.0
19.4
8.77
8.80
9.88
10.8
11.4
12.3
13.0
13.8
14.6
15.4
2.00 2.03
2.21
2.14
2.26
2.30
2.26
2.27
2.28
2.25
2.23
(Current) as % of Revenue
0.43
1.18
1.33
1.47
1.58
1.71
1.83
1.46
1.01
current)
1.03
1.18
1.16
1.14
1.18
1.20
1.15
1.17
1.19
0.60 0.62
0.69 1.36
1.50
1.55
1.63
1.72
1.82
1.92
2.01
0.29
0.44
0.48
0.50
0.51
0.52
0.53
0.83
0.83
4.22
0.72
0.72
3.43
0.77
0.77
3.34
0.84
0.84
3.31
0.93
0.93
3.38
1.04
1.04
3.52
1.15
1.15
3.64
1.24
1.24
3.77
1.32
1.32
3.86
0.39
3.13
3.23
3.19
2.80
2.78
2.86
2.92
3.00
3.08
3.13
3.16
22.9
17.8
16.3
12.1
10.6
8.58
8.58
9.08
9.58
10.6
11.6
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
1.56
n/a
1.19
n/a
1.04
n/a
0.63
n/a
0.56
556
0.56
564
0.64 0.70
640 701
CONTENT@TREFIS.COM
35