Paperstand (SAP, TLEO)

According to the WSJ’s „Heard on the Street” column, when the CEO of SAP (SAP), Henning Kagermann, lays out the co's strategy before investors and analysts tomorrow, he will have to explain an unsettling paradox: Why big players like SAP are missing their earnings tgts when spending on business software is increasing. The scenario is frustrating for the big players b/c they haven't been able to cut themselves a larger slice of the business-software pie. Co’s are expected to spend $334bn on software this year, up 8% from last year, according to Forrester Research. Some argue SAP's slump highlights a broader shift under way in business software in which start-up co’s wield an advantage over established titans. "Increasingly, it's going to be hard for the big vendors to really outpace the industry, b/c the real growth is going to come from the more-disruptive players within software," said Brendan Barnicle, of Pacific Crest. He has a Sector Perform rating on SAP.

Barron’s Online „Inside Scoop” section reports that Dutch media tycoon John de Mol is keeping a close eye on Taleo (TLEO) as the software co emerges from its financial woes. De Mol's investment vehicle Talpa Beheer disclosed it spent nearly $11.5M to accumulate 1.12M shares of Taleo, or a 5.15% stake. Considering Talpa only recently crossed the 5% threshold requiring SEC disclosure, Ben Silverman, of InsiderScore.com, says it appears that De Mol "already bought the stock at weaker levels than now and even with his cost basis, he's up almost 30% based on the stock price today." "De Mol is certainly an interesting guy to keep an eye out," given his track record as a media entrepreneur, says Silverman. [De Mol sold Endemol, the TV production firm he founded, for roughly €5bn in ‘00.] Also, Silverman notes that international investors tend to be "somewhat selective" in building major stakes in US stocks.