Owner and CEO, GR20 Research

Gregory Ramirez

Owner and CEO

Industry Research and Consulting Services

GR20 Research

GR20 Research provides industry research and consulting services

Equity Bottom-Up

SAP SE is a multinational software company. The Company develops business software, including e-business and enterprise management software, consults on organizational usage of its applications software, and provides training services. SAP markets its products and services worldwide.

<ul>
<li>At Connect, SAP unveiled its new Business Suite, integrating AI across finance, procurement, supply chain, HR, and customer experience. Central to this is the Joule AI assistant and BDC Connect.  </li>
<li>SAP introduced finance, HR, procurement, logistics and CX agents. Joule now acts as a digital co-worker. New applications like Supply Chain Orchestration, Logistics Management, and Engagement Cloud extend AI-native capabilities.   </li>
<li>SAP’s “flywheel” vision aims to embed AI into business processes through unified AI, data and application layers. Real revenue growth will depend on organisations consolidating data into unified semantic models.</li>
</ul>


At Connect, SAP unveiled its new Business Suite, integrating AI across finance, procurement, supply chain, HR, and customer experience. Central to this is the Joule AI assistant and BDC Connect.  
SAP introduced finance, HR, procurement, logistics and CX agents. Joule now acts as a digital co-worker. New applications like Supply Chain Orchestration, Logistics Management, and Engagement Cloud extend AI-native capabilities.   
SAP’s “flywheel” vision aims to embed AI into business processes through unified AI, data and application layers. Real revenue growth will depend on organisations consolidating data into unified semantic models.


SAP (SAP GR): “Agentification” of the Business Suite Accelerates

Capgemini offers information technology services. The Company provides mobile software solutions, business process management, outsourcing, cloud computing, finance, consulting, supply chain management, engineering, and other services. Capgemini serves aerospace, defense, automotive, health care, life science, telecom, media, and entertainment industries worldwide.

<ul>
<li>Capgemini’s acquisition of WNS is aiming to transform its BPO capabilities through AI. The acquisition, at a 35–40% premium over Genpact, boosts Capgemini’s BPO revenue share to 8%. </li>
<li>The strategic rationale hinges on leveraging AI to move the BPO model to outcome-based, intelligent operations. While WNS brings industry-specific platforms and early digitalisation, AI adoption is still nascent.   </li>
<li>Capgemini targets 7% EPS accretion by 2027 via synergies, though the high acquisition price leaves limited margin for error. Short-term share price impact is likely muted until margin gains emerge.  </li>
</ul>


Capgemini’s acquisition of WNS is aiming to transform its BPO capabilities through AI. The acquisition, at a 35–40% premium over Genpact, boosts Capgemini’s BPO revenue share to 8%. 
The strategic rationale hinges on leveraging AI to move the BPO model to outcome-based, intelligent operations. While WNS brings industry-specific platforms and early digitalisation, AI adoption is still nascent.   
Capgemini targets 7% EPS accretion by 2027 via synergies, though the high acquisition price leaves limited margin for error. Short-term share price impact is likely muted until margin gains emerge.  


Capgemini (CAP FP): WNS - A Bet on the Agentic AI Revolution

Thematic (Sector/Industry)

<ul>
<li>The US has imposed a USD 100,000 fee on H-1B visa applications, aiming to prioritise high-skilled, high-wage applicants. The measure is expected to shift offshore firms further toward local hiring.   </li>
<li>Capgemini and Atos, the only European firms with H-1B activity, are less reliant on US-based visas. Limited exposure means the new fee would have only a modest impact on costs.   </li>
<li>While visa-related changes pose limited risk to European players, greater disruption could come from the rise of agentic AI and the uncertain trajectory of anti-outsourcing legislation like the HIRE Act.</li>
</ul>


The US has imposed a USD 100,000 fee on H-1B visa applications, aiming to prioritise high-skilled, high-wage applicants. The measure is expected to shift offshore firms further toward local hiring.   
Capgemini and Atos, the only European firms with H-1B activity, are less reliant on US-based visas. Limited exposure means the new fee would have only a modest impact on costs.   
While visa-related changes pose limited risk to European players, greater disruption could come from the rise of agentic AI and the uncertain trajectory of anti-outsourcing legislation like the HIRE Act.


European IT Services: H-1B Concerns Are Overstated

<ul>
<li>SAP has acquired SmartRecruiters to strengthen its position in AI-powered talent acquisition, competing with Oracle and Workday; the deal enhances SAP SuccessFactors with advanced recruitment automation and candidate experience tools.   </li>
<li>We estimate acquisition likely cost SAP around USD 1bn, below 2021 valuation, and is not expected to materially impact 2025 revenues; however, it signals SAP's renewed focus on HR tech.  </li>
<li>Enterprise AI adoption remains slow, as vendors like SAP face challenges in data readiness and process integration; real monetisation of AI is expected after customers unify data under semantic layers.</li>
</ul>


SAP has acquired SmartRecruiters to strengthen its position in AI-powered talent acquisition, competing with Oracle and Workday; the deal enhances SAP SuccessFactors with advanced recruitment automation and candidate experience tools.   
We estimate acquisition likely cost SAP around USD 1bn, below 2021 valuation, and is not expected to materially impact 2025 revenues; however, it signals SAP's renewed focus on HR tech.  
Enterprise AI adoption remains slow, as vendors like SAP face challenges in data readiness and process integration; real monetisation of AI is expected after customers unify data under semantic layers.


SAP (SAP GR): AI Shakes Up Talent Acquisition Suites

<ul>
<li>In Q2 2025, European software firms—particularly small caps—experienced a slowdown in revenue growth due to geopolitical uncertainty and US tariffs, while large-cap players remained resilient and even accelerated growth.   </li>
<li>US software continued to outperform European peers, with strong momentum driven by AI, cybersecurity, and digital banking, but growth is stabilising below the high levels of the low-interest rate era.   </li>
<li>Software M&amp;A is recovering strongly in 2025, with USD 111bn in deals closed year-to-date—driven mainly by strategic buyers. Private equity remains active, particularly in Europe, though below historical peaks.</li>
</ul>


In Q2 2025, European software firms—particularly small caps—experienced a slowdown in revenue growth due to geopolitical uncertainty and US tariffs, while large-cap players remained resilient and even accelerated growth.   
US software continued to outperform European peers, with strong momentum driven by AI, cybersecurity, and digital banking, but growth is stabilising below the high levels of the low-interest rate era.   
Software M&amp;A is recovering strongly in 2025, with USD 111bn in deals closed year-to-date—driven mainly by strategic buyers. Private equity remains active, particularly in Europe, though below historical peaks.


European Software: Q2 2025 Takeaways – Europe Weakens, but Not the Large Players