Enterprise software giant SAP AG (SAP) went shopping this week. Late Wednesday, the German firm announced that it will acquire database and mobile software maker Sybase (SY) for approximately $5.25 billion in cash. SAP’s buyout offer of $65 per share represents a near 57% premium over Sybase’s Tuesday closing value of $41.57. The $23.43 per-share premium is quite high — some analysts think too high. The move by SAP will put the company directly into the database software market. It also represents an all-out attack on rival Oracle (ORCL), and apparently, the company thinks this attack is well worth the premium it’s paying.
According to the latest from the ChangeWave Alliance Research Network, SAP may be expanding at just the right time.
A recent survey measuring the outlook for corporate software industry revealed the strongest spending environment in over three years. The positive results also represent the sixth consecutive survey in which spending has registered an improvement. The measure of over 1,600 respondents involved with software purchasing in their company participated revealed that 20% say their company will spend more on software over the next 90 days. Only 13% say they’ll spend less.
In a further bullish sign for the sector, the spending increase is occurring across companies of all sizes, although the percentage of respondents projecting more spending over the next 90 days is highest among larger-sized firms — firms that SAP and Oracle call customers.
The survey also found a projected net increase in spending for the next 90 days across most software categories, with the biggest improvements occurring in business intelligence/reporting and analytics, supply chain management and data storage.
SAP’s Sybase deal will give them an even bigger presence in data storage software market, and the results show this metric up for the fourth consecutive survey. The chart here of data storage software purchasing trends shows the huge turnaround in the space since April 2009, and the trend clearly is in favor of data storage software providers.
Overall, the 90-day outlook for corporate software spending shows more strength than in any previous ChangeWave Alliance business software survey of the past 34 months, with particularly strong data storage software purchasing. This upbeat survey casts the SAP/Sybase deal in a favorable light, despite the sizeable premium paid for SY shares by the German giant. The survey also suggests that SAP’s data storage expansion comes at just the right time.
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Now that the recovery is under way, companies are spending money hand over fist for technology goods and services. And that means big things for these tech stocks. Each one trades for under $10 a share AND is set to double in the next 12 months — get their names here.
