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SAP (NYSE: SAP) has had a wealth of good news to share this week, as it announced a planned acquisition, reported rosy earnings and scored a significant coup.
First, with an eye toward ramping up its capabilities in business rules management, SAP announced Wednesday that it plans to acquire Yasu Technologies.
SAP will embed Yasu's solutions into SAP NetWeaver as a way to provide the business rules infrastructure that allows companies to consistently apply business rules to their business processes across heterogeneous computing environments. With the ability to centrally manage and monitor how business rules are maintained throughout the organization, SAP customers will be able to more easily comply with regulatory policies and better manage their business performance, SAP said.
Increased Responsiveness
"The momentum and maturity of the Business Process Expert community makes it clear to SAP that we need to support these professionals as they develop increasingly sophisticated ways to align IT with business goals," said Klaus Kreplin, corporate officer, member of the executive council and head of SAP NetWeaver Technology for Germany-based SAP.
"This acquisition gives our customers the solutions they need to be more agile, accountable and responsive to quickly changing business conditions," Kreplin added. "We welcome the Yasu Technologies team to SAP and look forward to adding these important capabilities to SAP NetWeaver."
The acquisition of India-based Yasu is expected to close this month. Terms of the deal 
were not disclosed.
"This gives them considerably more business process modeling capabilities than they had before, including the ability to extend business processes beyond the applications," Michael Fauscette, program vice president for applications with IDC, told CRM Buyer. "Integration will take a while, but it's a good technology addition."
EPS Increase
Hard on the heels of the announcement of the planned Yasu acquisition came SAP's preliminary third-quarter earnings report on Thursday, including news that earnings per share (EPS) increased 13 percent.
Software and software-related service revenues for the third quarter of 2007 were 1.74 billion euros (US$2.5 billion), up 13 percent over the same quarter a year ago. Software revenues were up 11 percent over the year-ago period to 715 million euros ($1 billion), and total revenues were 2.42 billion euros ($3.4 billion), up 9 percent over the same period in 2006.
SAP also continued to gain share in the third quarter of 2007, marking the seventh consecutive quarter of share gains.
Strong Quarter
"We are pleased to announce another strong quarter in which we continued to report double-digit growth in software and software related service revenues in each region and additional share gains among core enterprise application vendors," said Henning Kagermann, CEO of SAP.
"The third quarter also showed excellent results on the product side," Kagermann added. "For our established business, we demonstrated further progress on the business process platform with a continued increase in the number of customers adopting both SAP ERP (enterprise resource planning) and SAP NetWeaver. For our new business, we held the branding launch of our new breakthrough innovation solution SAP Business ByDesign, which has gone live with 20 customers. We look forward to the remainder of the year, as we continue to invest in our business for future growth."
Key Customer
Finally, SAP followed its earnings report with a bang Thursday, when it also announced that Wal-Mart (NYSE: WMT) has chosen SAP to enhance its financial information systems. The $350 billion global retail giant plans to implement SAP globally in phases, with the first phase expected to be completed in 2010.
"Technology has played a central role in the growth and success of our business," said Rollin Ford, executive vice president and chief information officer for Wal-Mart. "We believe SAP's experience in helping global companies with their financial systems will bring more flexibility and scalability to our growing business."
Taken together, the news adds up to a healthy outlook for SAP, Ross MacMillan, an analyst with Jefferies, told CRM Buyer.
"Although the guidance was lower than I expected, the quarter was in line," MacMillan said. "I sense some conservatism for the fourth quarter and also that they want to keep growth expectations in check for next year, but I don't see that as a particular issue."
'Competitive Win'
Indeed, the reality for SAP is that it has grown organically, without major acquisitions, by 16 percent year-to-date on a constant-currency basis, and "that's the best growth rate they've put up for at least four years," MacMillan noted.
Gaining Wal-Mart as a customer is "a big competitive win" in SAP's race with Oracle (Nasdaq: ORCL), he added. "It's relatively small in scope today but it has the potential to be much bigger."
Indeed, because the deal is for core financials only, it's an important one, but still "not a verticalized retail solution," Fauscette agreed. "Of course, once they have entree there, there's always the opportunity to cross-sell and up-sell."
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