SAP reported that the second quarter contaminated by corona is progressing very smoothly. Despite the “very difficult environment”, it is still possible to improve the results. Therefore, it is not surprising that stock prices continue to rise.
However, the stock of ServiceNow, managed by former SAP CEO Bill McDermott (Bill McDermott), is now stronger. Both IT departments want to adapt customers from the cloud. There are enough reasons to compare with SAP share.
SAP and ServiceNow business overlap
The worlds of SAP and ServiceNow are basically separate. This Walldorf-based company is mainly responsible for inventory management and resource planning, while ServiceNow helps optimize operational service processes.
Both companies are trying to achieve mutual integration, which also proves this. For example, in 2019, a solution was proposed that facilitated the interaction between SAP SuccessFactors and ServiceNow’s NOW platform.
ServiceNow’s NOW platform can help companies run smoothly and efficiently from IT and development departments to human resources and customer service to employee applications. Therefore, even if the company is in a liquidity crisis, it may need to use mission-critical software.
In fact, many customers can extend the use of their digital tools to help applications working in remote areas, so in the long run, this pandemic may benefit ServiceNow.
SAP is also actively using remote services to satisfy customers during the pandemic. The “Basic Business Services” package is designed to ensure business continuity, whether it involves customer service, supply chain, management or other necessary business processes.
Overall, it can be observed that the two are approaching each other: by configuring from the cloud, both ServiceNow and SAP hope to play a decisive role in accelerating the digital transformation of their customers.
Number of SAP and ServiceNow
There is no doubt that we have two huge success stories. In nearly fifty years, SAP has developed into one of the world’s leading business software companies. With HANA and other outstanding technologies and the far-reaching corporate restructuring carried out by Bill McDermott, the future is bright.
The development of ServiceNow, which was founded as Glidesoft only in 2003, is even more impressive. With its niche software a few years ago, the company has developed into a powerful company with a worldwide reputation in just a few years, and is currently seeking the next leap forward under McDermott’s leadership.
Charts created using YCharts; percentage of SAP and ServiceNow course development since 2012
SAP is still a more valuable team, but despite the excellent performance of the SAP courses, ServiceNow is getting closer and closer with a 7-mile boot distance. Some other key figures provide information about the current ratio:
| Current service | sap | relationship | |
| Market value 07/10 | 81 Mrd. USD | 166 billion euros | 43% |
| Sales 2019 | 3,3Mrd.USD | 27.6 billion euros | 11% |
| 2019 net profit | 0,6 USD | 3.3 billion euros | 16% |
| employee | 11.000 | 100.330 | 11% |
Table created by the author based on company information; rate calculated using exchange rate 1 EUR = 1.13 USD
If this trend continues, ServiceNow will soon become half of SAP in terms of market value. However, in terms of sales, SAP’s scale is 9 times its size, and its profit is 6 times. This clearly shows that the ServiceNow market will also expect to achieve higher growth rates in the future.
Latest figures
ServiceNow reported a 34% increase in revenue in the first quarter and earnings per share of $0.24, both exceeding expectations. Despite the pandemic, ServiceNow still predicts a steady growth rate of 29-30% for subscriptions in the second quarter that just ended.
On the other hand, SAP’s cloud revenue increased by 20%, and its adjusted operating revenue increased by 8%, which left a deep impression on analysts. The growth rate of the cloud business is expected to be similar throughout the year. In addition, management adheres to the mid-term goal, which assumes that profit margins will increase substantially.
The safe option is called SAP
We are dealing with two great and anti-pandemic companies, and they will certainly continue to be successful in the next few years. Investors should remember, however, ServiceNow stock has a lot of value for future growth. No dividends are paid.
In contrast, even at the current higher level, SAP seems to be very cheap. Thanks to the completion of the restructuring work and market dominance, the growth of profits and cash flow can be foreseen. This will not only push prices up, but also increase the payout ratio.
Compared with the chart rocket ServiceNow, the post-SAP share: The digital transformation of your warehouse first appeared in The Motley Fool Germany.
Canada’s answer to Amazon.com!
…And why this may be our second opportunity to build a true e-commerce wealth. Smart money has begun to invest in a company in Ontario whose development is still far behind the public’s vision: this particular e-commerce company can resist Amazon and benefit from the rapid growth of the market.
Request a special report and all details here.
Ralf Anders does not have any of these stocks. Motley Fool owns shares in ServiceNow, Inc. and recommends it.
German Mottled April Fools’ Day 2020
Picture: SAP AG
.
#SAP #Chart #Rocket #ServiceNows #share #digital #transformation #warehouse
More from Source