SAP AG (SAP), the largest maker of business-management software, slumped to an eight-month low after competitor Oracle Corp. (ORCL) reported quarterly sales that missed estimates, fueling concerns about weaker license demand.
Oracle, based in Redwood, California, also forecast profit per share for the current quarter at the low end of a range of analyst projections. SAP shares declined as much as 2.5 percent to 55.20 euros, their lowest intraday price since Oct. 29, and were down 2 percent as of 11:15 a.m. in Frankfurt trading. Volume was 81 percent of the three-month daily average.
Software buyers, led by those in the U.S., are increasingly opting for software they can access via the web rather than for packages that take weeks or months to be installed on their own servers. Oracle and Walldorf, Germany-based SAP have both acquired a series of cloud software providers to meet this demand and to keep Salesforce.com Inc. (CRM) and Workday Inc. (WDAY) from taking parts of their core business.
"The structural shift seems to be happening faster than anticipated, and these two dinosaurs are feeling it," said Thomas Becker, an analyst at Commerzbank AG in Frankfurt who recommends investors hold SAP shares. Still, "the correlation between the two isn't that high -- a string of bad quarters for Oracle doesn't necessarily mean SAP is suffering the same."
SAP which was the fifth-best performer in Germany's 30-company benchmark DAX Index last year with a 49 percent gain, has lost about 8.6 percent this year.