FRANKFURT SAP (SAPG.DE), the world's biggest maker of business software, has taken market share from arch rival Oracle ORCL.O for the first time in 1-1/2 years, according to its latest results, analysts said on Wednesday.
"SAP is regaining market share more quickly than we had expected. For the first time in seven quarters, SAP's organic license growth has outpaced that of Oracle, we estimate," said Rajeev Bahl at Matrix Research.
The German company late on Tuesday raised its outlook and said license revenues jumped 35 percent in the second quarter.
"We believe SAP saw increases in both the volume of deals and the number of large deals," said Stacy Pollard analyst at JP Morgan.
Bahl estimates SAP's organic application growth, excluding Sybase which it bought last year for $5.8 billion, was 18 percent during the quarter versus 16 percent for Oracle, noting SAP's new strategy of offering tailor-made services is paying off.
SAP in the past relied on the large, integrated software systems it has sold to many of the world's biggest companies and has been slow to adjust to offering on-demand services in an era of cost-cutting and cloud-computing.
It has however begun to gain traction with its "business by design" software targeted at smaller companies of various sizes.
SAP is betting on its mobile and so-called in-memory data bank technology, which is designed to make analytical software more powerful by accessing data stored locally on a chip instead of on a server, which allows it to cater to a wider variety of clients.
It plans to fold this into its core software products, helping it to reach revenue of 20 billion euros ($29.05 billion) by 2015, up from 12.5 billion last year.
"A lot of apps in the mobile world have been consumer toys. We bring the mobility into the business game. That strategy is now paying off and we are now seeing the benefits," SAP's co-chief Jim Hagemann Snabe said in an interview with Reuters Insider.
SAP shares were up 2.2 percent at 44.3 euros by 1103 GMT (7:03 a.m. EDT) on Wednesday, extending Tuesday's gains when the German company raised its forecast just before the market close.
On Wednesday French IT services provider Atos (ATOS.PA) raised its 2011 operating margin target as the integration of the former Siemens (SIEGn.DE) IT unit SIS which it bought last year was progressing faster than expected.
It also said revenues in the United Kingdom recovered thanks to demand in the public sector.
Last week IBM (IBM.N) said signings of new business at its services division surged 16 percent in the second quarter, while last month Oracle said its software sales rose 19 percent in its fiscal fourth quarter.
(Additional reporting by Gwenaelle Barzic in Paris; Editing by Greg Mahlich)