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SAP is lashing out at Wellesley Mass.-based Nucleus Research Inc., calling a report that is said to debunk a high profile SAP advertising campaign "shoddy research."
Nucleus Research released a research note last week which found that, contrary to SAP's advertising claim that its customers are 32% more profitable than their peers, SAP customers were in fact 20% less profitable than their peers. SAP customers had an average return on equity (ROE) of 12.6% versus an industry average of 15.7%, according to Nucleus' note. Ian Campbell, Nucleus' president and CEO, said the four page research note was the result of an analysis of 81 public companies that use SAP software and were listed on SAP's Web site. In an interview with SearchSAP.com, Campbell called the research the "most exhaustive look at SAP public companies to date." "Ours is the best and most public report," Campbell said. "We don't' draw any correlation between SAP and profitability and doing so is a foolish thing. SAP made that correlation in their advertising."
SAP's 30-second television commercial, which began running Nov. 14, shows office workers and shop floor personnel applauding, while an announcer communicates that companies that run SAP are 32% more profitable than those that don't run SAP software. The commercial was part of an expansion of SAP's "Outperform" print advertising campaign, which launched during the week of Oct. 24, appearing in The Wall Street Journal, and several other magazines. SAP Spokesman William Wohl said Nucleus' research should be ignored. He called Nucleus' sample size too small to be statistically relevant and said that some of the company ROE data may have been reported inaccurately. "We put companies on our Web site for a variety of reasons and some of them might not even be live with SAP," Wohl said. "The point here is that the sample size is so small and so random it clearly shows what a shoddy research job they did." Wohl did not release the complete SAP funded report, completed by Marlborough, Mass.-based Stratascope Inc. Wohl said the methodology used was more granular, concluding with facts that back the statements in the SAP advertising campaign. Stratascope metrics Stratascope studied all 4,628 companies reporting on the New York Stock Exchange and NASDAQ exchanges as of August, 2005. The research firm eliminated more than 800 financial services companies since they do not report financials in a way that compares with other SAP firms. Companies reporting less than $50 million during their last four quarters and companies recently de-listed were also eliminated. The result was a customer population of 587 companies versus a non-customer population of 2,769 companies, according to Wohl. "Comparing Nucleus to Stratascope is like comparing apples to rotten oranges," Wohl said. "It doesn't matter what the facts are, their goal is to get Nucleus in the news." Campbell said the Nucleus study included collecting public ROE data on the 81 public companies listed on the SAP Web site and comparing it with industry averages provided by Hoovers, a company information site for investors. "Nucleus went out to validate SAP's advertising claims because SAP refuses to publish its report," Campbell said. "Until a report is published it doesn't exist."
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