Recession? What Recession? Here’s 91M for Inventory Software

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I couldn’t help but notice this recent article in Intelligent Enterprise that noted that SAP offered 91M for SAF. Now, good inventory management software is extremely valuable because it can significantly reduce the 30%+ overhead (on product cost) that many organizations lose in inventory each year, but SAF is a little company of about 100 employees that only had 19M in revenue last year. That’s a 4.8 multiplier … in a down economy!

Forget the current share price, which likely skyrocketed on the rumor alone. You invest based on the likelihood of getting your money back in a reasonable time-frame. Considering that most small company sales drop considerably when they’re swallowed by an 800 lb gorilla, SAP will be lucky to get their money back in five years.

But more importantly, if that 91M had been funneled into an R&D group with some freedom, imagine what that could have built! Maybe they could even realize their Vision of the Future. Instead, as far as I can tell, they’re just spending more of their customer’s money on empty calories by paying too much of a premium. Well, at least they ain’t spending 5 Billion for Business Intelligence.