I know nothing about SAP but can see the potential attraction to recurring revenue streams from the world's largest and most profitable companies. That they are likely the most complex, largest numbers of humans, processes and all kinds of risks in SAP's customer base. It's not hard to imagine that these companies are unlikely to switch software provider. How would they even do that in a huge international organisation. The challenge would be mind boggling and it's almost certain the thousands of humans involved would make a mess of it. Why would leaders take the risk. The offering and roadmap would have to be incredibly bad. I doubt that is the case if the world's largest companies are using it. Better to stick with SAP and evolve with them - cloud, AI and whatever comes next.

Of course, sticky customer bases are very attractive, one decision investments, that just do well over decades. All you have to do is never sell.

Anyway, as I say, I haven't looked at SAP but the reason for posting, is that I was talking to one their customers today who is responsible for SAP. "To replace SAP would take 5 or 6 years. They could increase their prices to us by 20% and there is absolutely nothing we could do about."

I get the impression that SAP is a business that has a durable competitive advantage and pricing power. I definitely should take a look at it some time.

I had a quick peak at their latest results and this line caught my eye:
2026 management guidance: "Approximately 10 billion free cash flow at actual currencies (2025: 8.24 billion)."

I don't think I would be excited to pay 20 or 25 times that. But it potentially fits the bill for a one decision company, if something like a wider stock market sell off took it down 15x. I should look into it and prepare for that possibility. A kind of reasonably priced company before a crash can become attractively priced quite easily. Unlike some great company at 50x that falls to 35x.