r/wallstreetbets
What do we think about SAP, SF…
Data vet asks why CRM and SAP are undervalued vs skyrocketing cloud giants like MSFT and GOOGL, noting SNOW's lower adoption.
- Enterprise software sector presents deep value opportunities compared to skyrocketing cloud giants.
- High switching costs in legacy systems create strong competitive moats.
- Newer data technologies face adoption hurdles compared to entrenched platforms.
"I’ve been working in Big Data for about 6 years now.
In my day-to-day, I deal with SAP, Salesforce, Databricks (private), Fabric, AWS, and Snowflake.
AWS, Microsoft (Fabric), and Google are skyrocketing, yet others that are incredibly strong, like SAP, are hitting rock bottom—even though it’s the kind of company that, once it has you, it traps you.
You basically can't leave because it’s not worth the effort, and as a transactional system, it’s unbeatable.
Why are Salesforce and SAP so undervalued? I can understand Snowflake more; it's rarer to find companies using it, and it’s a newer technology.
What would you do? Is it a good investment for a 3-4 year horizon?"
I have SAP leaps because I think it’s undervalued. Havent seen much from it yet as it’s been downgraded a couple of times
Here’s to hoping
SAP is like that old reliable car that never breaks down but nobody wants to buy because its not shiny - problem is market keeps chasing the AI hype instead of looking at actual sticky revenue
Eat my dongus you fuckin nerd.
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Too expensive to change to another shitbox because customers has been customizing their car for 30 years and it's structural to the business at this point. That's pretty much their entire business model.
Its also being structurally upgraded to align data so its easily accessible by new tools, like Ai. It wont be replaced for decades, if ever.
However thats changing as they are forcing more and more to use the cloud solution where the highly customized and even custom coded pieces do not work anymore.
However its like banking mainframes. Changing the whole thing will take more than 5 years, cost a lot of money, has huge risks and is not a shiny thing to do - so almost every CEO will avoid it.
Because people think SAAS is dead because of AI. Yet they don't account for AI development still takes time and money, which may or may not compete with pricing. Especially if there is any sort of compliance involved, then I just don't see why SAAS companies would lose out, they'd also benefit from AI anyways.
Imo a lot of SAAS companies are undervalued because of what ifs, that don't seem super likely and where the math never really adds up. Except palantir, but hey, having a DBMS with AI integration that mostly government buys, apparently makes you twice as valuable as SAP, even though you're revenue is 8 times smaller and you have way more competition with a much smaller customer base.
This “pivot.” Is it in the room with us now?
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SAP is just a no brainer
Sap and Microsoft hard buy, sfdc stay far away from that sinking ship
One big part of the valuation is the fact that Snowflake has under 10k employees while SAP has over 110k.
I do work for SAP and they have been spending like crazy lately.
On?
Build out in their HQ in Hudson yards. Innovation center to showcase how their tech is used in different settings.
Thanks
Yeah I hate Salesforce and SAP. But they aren't going anywhere.
I hate most of the things that make me money
I think it’s a great long term buy and hold. SAP is integrating AI into their workflows and adding a lot of value to their products through that. They are also slowly continuing to buy and integrate other products to add to their ecosystem. They are going to keep extracting money from their existing companies. And as those giant customers grow, SAP is going to keep charging them more and more while switching to a competitor becomes harder and harder.
SAP is a sticky dinosaur and it’s not going anywhere. AI isnt a threat when the biggest reason to use SAP products is because switching to literally anything else would be too painful.
Eat my dongus you fuckin nerd.
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I totally agree with you and TBH I wouldn’t trust the info that goes into SAP into any new AI slop app. Specially considering the volume and the criticality of it.
I’ve bought 7 shares, and i’m thinking on doing DCA for a couple of thousands € more next months
Corporations won’t rip out SAP overnight, but they pretty much can use it less and less over time, and even if they just wont increase their dependency, it will affect SAP margins and the dinosaur will eventually collapse under its own weight. Thats what the market tells you.
Great buying opportunity. It's very cheap now and it has absolutely no replacement.
trashbags
AI is going to allow big players who have a significant number of engineers, developers, and architects inhouse to move away from things like salesforce and develop their own solutions easier. Today they look for off the shelf vendor solutions they can integrate and that's what their folks spend time on, but it's only going to get easier for them to develop their own solutions they can customize as needed to tailor fit their needs. AWS and microsoft, will remain strong for data hosting/cloud storage...microsoft owns git, office 365, sharepoint, teams etc find a fortune 500 not using them...and everyone's using AWS.
Anecdotally I've never heard anyone that works with salesforce products at a large company talk positively about the experience either so there's that.
No
I’d argue SF, but SAP? I don’t think so
I agree with this, but I the money will move when wall st thinks they can make more money investing in SaaS than these AI pipe dream companies. The expectations for AI are insanely huge. Wall st has set themselves up to be disappointed unless these AI companies all hit grand slams and it’s just not gonna happen. AI is great but it doesn’t solve everything and won’t replace legacy SaaS companies whose value is in their data, integrations, and pure inertia due to the cost of implementing massive pieces of software like an ERP into a business.
On the other hand, expectations are low for SaaS companies. You said yourself wallstreet expects AI to replace them entirely but that just isn’t going to happen. Once wall st comes to this realization, the money is gonna come flowing back into SaaS.
CRM with a new 52wk lows 10 days after touching $211. Guess where I bought.