Its been a interesting few months for SAP investors. Stock has jumped from $72 on 6/27/2016 to $103 on 5/12/2017. MCap jumped from $70Billion to $127Billion!!
That opens a possibility to think is the stock headed to a market capitalization of $200 Billion?
I think there are 3 mega trends which may make this happen.
Upcoming SAP HANA upgrade super cycle – We are seeing that all customers (approximately 55,000 ECC users) will switch to HANA for sure in next few years.
SAP is winning big time in cloud growth – 330,000 customers with a lot more growth left. I see SAP having ONE million customers in 5 years
P/E earnings of SAP is so low at 31.5, its unbelievable – compare this with P/E of Salesforce is 343.7!! Workday other competitor’s P/E -50!! Workday lost $105Million on a $436M revenues.
Finally, SAP is THE king of enterprise system. I would be surprised if any other system can close financials the way SAP can execute.
I think there will be a few more acquisitions SAP will do in next 12-24 months, may be WorkDay. I would expect SAP to hit a $200 Billion in market cap before 2020. I am sure Hasso Plattner /@BillRMcDermott and others at SAP will be smiling!
All of us have been seeing many articles recently about the coming armageddon of job losses. Some have even predicted that almost 75-80% of all jobs will go away. Time for us to take step back and use our “natural intelligence” before falling for this chicken-little syndrome.
I was introduced to the fascinating world of AI by my professor MGV in my engineering days in 1990! By then, he had done his Phd in AI 🙂
So, just remember. AI is not new by any stretch of imagination. It’s been in the works for last 35-40 years.
Will it change the world? Yes for sure.
Will it kill all the jobs? No for sure.
Here is what will happen like all technology waves.
1/3 of the smarter people will find really exciting careers in next wave of technologies, be it in programming, digital-manufacturing, bio-engineering and so.
1/3 of the average skilled people will lose their high paying jobs and move to lower paying jobs. The salary cuts will be like 30%-50%. The transition for these people will happen but its tough.
The bottom 1/3 people (what I mean is people who refuse to learn, take additional courses in new areas, update their skills on a daily/weekly/monthly and annual basis AND people who are lazy to upgrade their knowledge), will have the toughest period. The brutal wave of job losses will hit this crowd. Remember in early 19th century US had half a million women telephone operators in AT&T alone!!
This has happened in various old-age industries…will continue again in ALL industries. The only difference this time, tsunami will start in our own IT industry.
Question is which group do you belong. The smart, the average or the dinosaur?
Jack Welch had told this ::“Change before you have to”
[huge_it_share]Normally, I read books very fast. Once in a while you stumble upon a book which is so insightful, you “study” instead of reading. One such book is a book by Steven Johnson’s How we got to NOW
I am amazed by the clarity with which Steven has weaved multiple strings of science history into coherent and yet simple 6 streams, which changed modern world.
Here is a quick summary of 6 inventions which changed everything for modern human society.
1. Glass – The natural pieces of glass were first found in deserts of Libya Desert and the processes how merchant families of Venice figured how to make glass. That was the real “silicon valley”. Surprising link from glass to printing press is amazing reading. From there on a series of innovations like books, telescope and so on all starts with glass.
2. Cold – Who would know that in 1800’s the biggest export from Boston was ice and the largest and most profitable market for ice was Mumbai, India?? Thats an amazing piece of history there. Ice-trading was mastered by a guy named Fredric Tudor who eventually figures how to export frozen ice from lakes of Boston around the world. He went bankrupt twice and arrested during this process. He made $100M (in todays dollar terms) finally. Ice making paved way to refrigeration and hence frozen food which eventually changed US and world.
3. Sound – Interesting reading about how Thomas Edison patented his “phonograph” while a french man named Eduard Leon Scott who was a great scientist but not a marketing genius like Edison has already patented “Phonautograph”. I am sure he died poor. Inventors never make money, but inventors with a marketing streak makes it all. There are some interesting connections between how invention of recorded sounds lead to sonograms and eventually to ultrasound which changes the male-female ratio in china due to male obsessed societies. A little far fetched, but when you see in scientific context, it sounds true though.
4. Clean – Its amazing to read about a New Jersey doctor John Leal, who came up with the idea to chlorinate the water to kill bacteria. Can you imagine anywhere in the world drinking safe clean water without chlorination? This man must have single handedly changed the course of human history by saving millions may be billions of babies since 1908. And he did not patent his invention, or build a product and sold it etc. He made this the first true “open-source” invention for the benefit of human kind. What an amazing story.
5. Time – How many times in a day do we look at our iphones and watch to see time. I did not know that all the clocks in all the cell phones are linked and connected to a series of low altitude geo synchronous satellites, which maintain the global timing!! A lot of history about time keeping. Steven doesn’t discuss many other cultures which kept time tracking very accurate. However he writes about a railway engineer William Allen, how he creates the US time zones to manage the railroad traffic!!
6. Light – This is a heart wrenching story.
Did you know that Manhattan of New York was a very big slum – Half a million people living in 15,000 units. Almost like Dharavi of Mumbai. I pondered if Dharavi could be transformed someday like Manhattan. How an experiment called “BlitzLicht” (aka flash light) in 1888, lead to flash lights of photographs which showed the plight of poor immigrants living in the slums of NYC!! This chapter goes on to describe how the experiment of usage of a wasted gas to be used in Neon lights which changed the face of Las Vegas 🙂
7. Added Bonus of Time travel : – Where do we go from here. Almost 150 years back, Charles Babbage and surprisingly Lord Byron’s daughter (who was a “programmer” in those days!!) predicted what today’s google, iTunes or hyper text – all that too in one footnote.
I started pondering after finishing this book….my 3 questions,
Where we came from – Human life’s origin
What is the purpose of life?
Who created life?
If you have answers for these 3 questions, you know how to reach me!