Analyst Questions Sales Numbers For SAP's 'Fastest-Growing' Product

Bill McDermottSAP’s Co-CEO Bill McDermott

SAP’s fastest-selling product of all time, known as HANA, may not be as growing as fast as the company says, according to one Wall Street analyst.

SAP may have “inflated” the growth figures, says analyst Peter Goldmacher of Cowen and Co., as reported by AllThingsD’s Arik Hesseldahl.

HANA is a realtime in-memory database appliance and SAP has been using it to attack and steal business from its long-time foe, Oracle.

SAP executives have not only called HANA the fastest-growing product in the history of SAP, co-CEO Bill McDermott said it was “the fastest growing software product in the history of the world.”

Goldmacher questions this in his research report:

“If we take management at its word and believe that HANA’s two-year licence growth [rate] through FY13 is about 120 per cent, then this means that the other 90 per cent of SAP’s licence business, Apps and BI, is growing at … roughly 2 per cent, materially below category growth rates … Our research and experience lead us to believe that SAP is allocating product revenue subjectively and that this is resulting in an inflated HANA growth rate.”

SAP doesn’t break out HANA’s results. It lumps all of its software products together into its one unit, which includes HANA, mobile, other wares.

SAP can manipulate the growth rate by bundling products together, offering big discounts on its bread-and-butter apps, while charging full price for HANA, Goldmacher says.

This makes it look like revenue for HANA is growing fast, but that growth is really coming, at least in part, from sales of SAP’s other products.

SAP spokesperson Jim Dever says that the analyst has it wrong.

“Roughly half of HANA business is stand-alone deals, HANA and nothing else. We think his report could not be more inaccurate in its assumptions,” he told Business Insider. “We have been consistent in our HANA pricing, our no-discount policy, and our reporting of growth rates and revenue results – and have no changes to announce.”

SAP says that its entire software line is growing. Its outlook is 11-13% revenue growth in software and software-related services and 14-20% revenue growth for software and cloud subscriptions.

The company reports earnings on April 19 and no doubt we’ll hear more about this then.

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