SAP / Oracle: cloud chasing Two things you can count on from an Oracle earnings release these days: weak software revenue growth and a potshot at a rival. Oracle's first-quarter release did not disappoint. Software licenses grew by just 1 per cent but, hardly chastened, Oracle said its cloud revenue for the year, projected to be $1bn, would exceed that of the upstart Workday and nemesis SAP combined. But, with SAP's shares beating Oracle's of late - since 2012, SAP's shares are up 32 per cent, twice Oracle's increase - SAP can only interpret Oracle's teasing as flattery. In the most recent quarter, SAP delivered total software revenue growth of 23 per cent, with its cloud segment increasing revenue by nearly 500 per cent. But beyond the numbers, SAP has generated buzz around the hottest software trends. Its "in-memory" HANA database analytics platform is the fastest growing software product in history, SAP brags, while the $7bn Sybase acquisition moves the German company into mobile software. SAP does seem to be outrunning its rival; that does not mean it is going particularly fast. SAP says that 2013 revenue from HANA will be €700m, up 70 per cent annually, and total cloud subscription revenue will double to €750m. Total software revenue, though, is approaching €5bn, which means that its old-fashioned software license business is growing in the mid-single digits at best. And the €1bn cloud revenue in 2013 and €2bn expected by 2015 comes from pricey acquisitions - Ariba and SuccessFactors together cost $8bn. Oracle spent just $4bn on cloud-related acquisitions for at least the same amount of revenue. Ironically, then, the valuation gap between the two (SAP's forward earnings multiple is 16 to Oracle's 12) may come down to hardware. Oracle's $8bn millstone, Sun Microsystems, has brought persistent double-digit revenue declines.