Bill McDermott, former boss sap (Nasdaq stock code: 716460), under development Serve immediately (NYSE: A1JX4P) is running at full speed. In doing so, he relied on the German software giant Celonis. Their joint measures may boost SAP’s stock price starting in 2022.
How ServiceNow and SAP are going to each other
ServiceNow is one of the most successful software companies in the past decade. Since mid-2012, prices have risen by more than 2,400%. Today, ServiceNow and SAP are almost on the same level. The European flagship company’s turnover is still more than five times its turnover, but in terms of market value, the lead is only less than one-third.
Use the chart created by YCharts. Development of the market value of ServiceNow and SAP in the 10 years ending October 8, 2021 (in USD)
The American company describes itself as a pioneer designer and digitizer in operational collaboration and customer service. Its cloud-based software platform “provides a digital workflow that creates a superior experience and releases productivity.”
Now, of course, SAP comes from a completely different corner, namely inventory management. However, during his tenure as the head of the Waldorf-based company, Bill McDermott has made a lot of efforts to align the company with the cloud and the “smart enterprise.” For a long time, digital workflow has been a part of core business. There is already a clear overlap in topics such as customer relationship management, service management, and project portfolio management.
It then made a transformative acquisition of Signavio in May. The resulting software “Signavio’s SAP Process Manager” is a “cloud-based software that supports recording, modeling, and simulating business processes.” CEO Christian Klein has high hopes for this. In particular, the “workflow accelerator” module is clearly aimed at ServiceNow. The “Process Intelligence” module provides important analysis functions.
What are ServiceNow and Celonis doing
Signavio’s competitors include the larger Celonis. ServiceNow is now seeking to cooperate with this. Celonis’ co-CEOs Alexander Rinke and Bill McDermott explained their latest developments on CNBC on October 8.
As in the case of commercial software, it has to do with digital transformation. Celonis’ ability to inspect and analyze chaotic processes (such as X-rays) will be combined with the ServiceNow workflow platform.
The goal is to achieve a higher degree of automation for customers by redefining the processes in the entire corporate landscape. Real-time insights should be directly translated into actionable improvement measures.
The jointly developed solution should be launched as early as next year. According to Rinke, its vision is to build a “new operating system” for the company. So far, the slogan “The world runs on SAP” has been firmly maintained.
What this means for SAP stock
Celonis should be very active in making this partnership a success. After all, before the acquisition of Signavio, the company was Process Intelligence’s SAP partner of choice. Although the innovation partnership remains largely unchanged, Celonis may feel deprived. At the same time, McDermott is an SAP insider who knows exactly what makes Walldorfers successful and where the weaknesses are.
This is how it developed for SAP Sales Network (NASDAQ: A0B87V) Another highly agile competitor initially has a completely different core business. Nevertheless, SAP will not give up market share without a fight. For its part, top dogs have some trump cards. Most importantly, a wider lineup and excellent partner network should ensure that SAP can protect itself.
Many large companies will certainly continue to be SAP customers even if they use ServiceNow. But it may be wise for investors to pay close attention to ServiceNow’s entry into the SAP field.
This article, beware, SAP shareholders! ServiceNow dared to make a frontal attack with German Celonis, and first appeared in The Motley Fool Germany.
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Ralph Anders does not own any of the aforementioned stocks. Motley Fool owns and recommends shares of Salesforce.com and ServiceNow, Inc. and recommends SAP SE.
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