July 27, 2012, 6:18 PM — While earnings from marquee-name tech companies such as Apple and Facebook disappointed this week, sales of mobile devices and enterprise software showed signs of growth.
The deluge of earnings reports offered mixed news about sales but followed a pattern that has become familiar. While the PC and components markets continue to face economic headwinds, smartphones, tablets and corporate software appear to be weathering the storm.
Half of the 175 board directors polled in The Gartner-Forbes 2012 Board of Directors Survey, released this week, said IT is their highest priority for investment in 2012, tied with investments in sales, even though more than half of the corporate executives said they were preparing for a market recession.
"You can't cut your way to greatness," said Gartner Vice Analyst Jorge Lopez in an interview. "There is a sense that businesses are more forward-looking now, that after the recession they cut as much as they could. We've seen a move toward shared services around HR, procurement, legal and finance, which liberated 15 percent to 30 percent of overall IT costs for new investments in areas of IT where companies feel they can get a competitive advantage."
SAP, the biggest ERP (enterprise-resource-planning) vendor in the world, reported on Tuesday that revenue for the second quarter increased 18 percent over the same quarter last year to Â¬3.9 billion (US$4.9 billion), buoyed by record software revenue of more than Â¬1 billion. Net profit was Â¬661 million, up 12 percent from a year earlier. Sales were lifted by Â¬85 million in business from its in-memory platform HANA in the quarter. The HANA platform will work with the company's core Business Suite ERP application modules by the end of this year.
SAP shares rose by $1.51 on Friday to end the week at $65.11.
NetSuite, an up-and-coming challenger to Salesforce.com in the cloud-based ERP software market, also offered an upbeat earnings report, announcing on Thursday that revenue for the second quarter was $74.7 million, up 29 percent year over year. Subscription and support revenue was $61.0 million, a 27 percent year-over-year increase. Excluding one-time charges, net income for the second quarter was $4.8 million, compared with net income of $1.6 million a year earlier.
NetSuite shares jumped $7.53 on Friday to close at $56.75.