SAP reshapes strategy for online software
By Richard Waters in San Francisco
Published: June 10 2009 00:09 | Last updated: June 10 2009 00:09
A top executive at SAP is set to outline a new strategy on Wednesday for delivering software over the internet, as the German software group struggles to respond to a market that poses a significant long-term threat to its business.
The early pace in the market for on-demand software, also known as “software-as-a-service”, has been set by newcomers such as Salesforce.com, which normally charge a monthly subscription fee for customers to access their software over the internet.
Speaking at a conference in Amsterdam on Wednesday, John Wookey, who is driving SAP’s on-demand software push, will outline a new approach that ties the company’s online services far more tightly to its traditional software.
“Until John got there, there was no strategy,” said Bruce Richardson, an analyst at AMR Research in Boston.
“It’s absolutely essential for SAP – if they don’t make a viable play in the on-demand world, they will be completely overwhelmed by it,” said Josh Greenbaum, an analyst at Enterprise Applications Consulting.
SAP’s first home-grown attempts to respond to the on-demand software revolution have failed to gain much traction. An online service for salespeople to manage customer relationships, rivalling Sales-eforce.com, has gained only “a couple of dozen customers” in its first three years, said Mr Wookey, though he said SAP was pressing ahead with a redesigned service.
Meanwhile, Business By Design, a full suite of online applications aimed at medium-sized companies, which represents one of SAP’s biggest investments in recent years, has faced teething problems that have forced a protracted delay in its launch, and executives admit that their initial plans were over-ambitious.
Acquisitions, including of software maker Business Objects, have since taken SAP’s number of on-demand customers above 1,000 and provided the foundation for it to lay out a broader strategy in the area, Mr Wookey said in an interview.
The German company’s new approach will be to integrate its online services far more closely with its traditional business software, in a hybrid model that tries to take advantage of the big installed base of SAP’s business applications.
Customers will be able to mix online services and traditional software without running into the sort of problems that currently bedevil the software-as-a-service business, such as balkanising a company’s data by holding it in different systems, said Mr Wookey.
“It’s a problem that only we at SAP can solve,” he added.
The simplicity of this hybrid approach is likely to have a big appeal to corporate technology departments, said Mr Richardson.
Mr Wookey also outlined a vision that would eventually see SAP open up its technology to allow other developers to build on-demand services that would tie into its software.
This more open approach represented “a bit of a cultural shift at SAP”, he added.
“It’s a big shift for any company to open up in that way,” said Mr Greenbaum. “They get it, they want to do it, it’s taking a little time to turn the tanker.”
Copyright The Financial Times Limited 2009
Showing posts with label SAP. Show all posts
Showing posts with label SAP. Show all posts
Wednesday, June 10, 2009
Friday, May 15, 2009
SAP BusinessObjects Explorer Is New Star at 20th U.S. SAPPHIRE
SAP BusinessObjects Explorer Is New Star at 20th U.S. SAPPHIRE
Friday, May 15, 2009
Bruce Richardson
If my calculations are correct, last week’s SAPPHIRE was the 20th that SAP has hosted in the United States. Next year will mark the 20th anniversary of the first one, which I recall as a small event held in New Jersey.
In viewing my reports from many of the recent SAPPHIREs, I noticed that I usually opened with the same complaint: SAP spends a small fortune hosting an event for 10,000+ of its largest customers and prospects, but neglects to try to sell anything during the keynotes.
I’m happy to report that co-CEO Leo Apotheker used most of his hour-long opening slot to sell, sell, sell. The most exciting new product is SAP BusinessObjects Explorer. SAP customers and partners may know it as Polestar.
The new Explorer allows customers to load and manipulate enormous volumes of data in memory, where it can be accessed instantly. At the press conference, one executive from Molson Coors said she loaded 900 million records. Searches across all of the records took less than three seconds. She was so impressed that she compared the velocity to that of the Space Shuttle launch she had witnessed the night before.
She taught her business users how to use the software after only a “five-minute WebEx training.” For her, the primary benefit is the ability to reduce the time needed to make a decision from one day to one hour.
Similar results were reported by an executive at Sara Lee. He said he loaded 290 million to 300 million rows of production data into Explorer. He deployed the software in three days and gave it to business users without providing any training. They took to it immediately.
Both agreed that with traditional tools, you may spend half your life on performance tuning. Given the speed of Explorer, there is no need for tuning.
What can you explore with Explorer?
One of the criticisms I had of Polestar and SAP’s Business Intelligence Accelerator was that they lacked applications or templates. Okay, so I can load a billion records, but what can I do with it?
While neither customer went into too much detail as to how the product is actually used, it’s not too hard to imagine businesspeople deploying the tool to instantly calculate customer profitability by product or region, compare forecasts to actual results, or argue for or against various SKU rationalization proposals based on data, not instinct.
In a meeting with SAP Business Objects’ CEO John Schwarz, I told him that I thought Explorer would make a great platform for third-party applications like Jonova’s business planning software. Imagine having the power and data needed to simulate the impact of moving to direct store delivery or to load point-of-sale (POS) and demand data from thousands of retail points and plan real-time replenishment strategies based on balancing costs and demand. If you can model it, you can make it happen. Of course, this would involve publishing the application programming interfaces. I’m not sure where that fits on the roadmap.
Clouds and SaaS
While none of the SAP executives talked specifically about a cloud version, I found an interesting set of PDF slides and a preview of “Explorer in the cloud” on the SAP Developer Network. The latter is available at https://create.ondemand.com/explorer
Mr. Apotheker’s keynote also featured one slide on SaaS. For large enterprises, SAP currently supports CRM, strategic sourcing, business intelligence, and carbon management. The latter comes from the acquisition of ClearStandards on the eve of SAPPHIRE. In the soon timeframe, SAP promised human capital management and expense management.
As you might imagine, we had a lot of questions. We were hoping to talk to SAP’s John Wookey during SAPPHIRE, but couldn’t get our schedules to mesh. Look for more next Monday.
SAP Business ByDesign: “Go on the offensive big time” in 2010
Jim Shepherd and I went to the exhibit floor to test-drive SAP Business ByDesign, SAP’s first entry into ERP as a service. The company has capped usage to 80 or so companies as it works on guaranteeing sub-second responses to transaction-intensive processes, improving the ease-of-use, adding more functionality, and figuring out how to make money in SaaS.
In my one-on-one meeting with Mr. Apotheker, he told me that if all goes well with the next release, SAP “will go on the offensive big time in 2010.” That should coincide with when he expects the economy to recovery.
He also said that SAP planned to sell Business ByDesign back into the customer base. The challenge has been the customers’ expectation that it will have all of the global functionality needed.
Two new topics for SAPPHIRE ’10?
In keeping with our tradition of offering unsolicited advice, here are two ideas for the next SAPPHIRE: the redesign or replacement of NetWeaver and a new holistic focus on marketing SAP services and support.
The idea that NetWeaver may need a refresh won’t create headlines. As one executive told me, “The time of the fridge is over.” The fridge is a reference to the refrigerator-like look of the NetWeaver product set. Over the next 12 months, SAP will likely embrace more third-party products such as Microsoft SharePoint, IBM WebSphere, and other application servers and integration products.
SAP will also need to get more aggressive on mobility. While I love my BlackBerry, it’s not the only smartphone. The company will also need to add a lot more capability around presence or location-based applications: Where are my people, and what’s the best way to reach them? Should I use IM, e-mail, phone, videoconferencing, or call the pro shop and ask them to find their golf cart?
While no application company seems to do a good job of selling and marketing their services and support offerings, the problem seems especially acute at SAP. One of Mr. Apotheker’s first moves when he assumes the sole CEO role on Tuesday should be to announce the search for a marketing executive responsible for all of SAP’s service and support offerings.
Maybe it’s me, but the service and support offerings seem to consist of pieces: Solution Manager, Value Engineering, Enterprise Support, MaxAttention, Run SAP, SDN, product documentation, consulting, implementation support, and the like. Someone needs to tie all of the offerings together in a clear, consistent package, and get customers to use them. We continue to be astonished by the large number of SAP customers that don’t use Solution Manager, Value Engineering, or SDN.
As if the job wasn’t daunting enough, the new person should also be responsible for making sure that the support tools are easy to use, and not be content that they are good enough.
Selling services and support will become increasing important as more of the lifecycle management burden falls on SAP. Many large customers will likely come to see SAP as their enterprise architect even in heterogeneous environments.
What do you think?
Will we see a battle royale emerge between SAP BusinessObjects Explorer and Oracle Exadata in the database appliance market? How do you rate SAP’s odds for success in SaaS? Is it serious about on demand? Can it displace best of breed? If you were redesigning the NetWeaver fridge, which features would you add or drop?
As always, I welcome your feedback and ideas— brichardson@amrresearch.com. Please visit my blog at http://blogs.amrresearch.com/enterprisesoftware.
--------------------------------------------------------------------------------
© Copyright 2009 by AMR Research, Inc.
Friday, May 15, 2009
Bruce Richardson
If my calculations are correct, last week’s SAPPHIRE was the 20th that SAP has hosted in the United States. Next year will mark the 20th anniversary of the first one, which I recall as a small event held in New Jersey.
In viewing my reports from many of the recent SAPPHIREs, I noticed that I usually opened with the same complaint: SAP spends a small fortune hosting an event for 10,000+ of its largest customers and prospects, but neglects to try to sell anything during the keynotes.
I’m happy to report that co-CEO Leo Apotheker used most of his hour-long opening slot to sell, sell, sell. The most exciting new product is SAP BusinessObjects Explorer. SAP customers and partners may know it as Polestar.
The new Explorer allows customers to load and manipulate enormous volumes of data in memory, where it can be accessed instantly. At the press conference, one executive from Molson Coors said she loaded 900 million records. Searches across all of the records took less than three seconds. She was so impressed that she compared the velocity to that of the Space Shuttle launch she had witnessed the night before.
She taught her business users how to use the software after only a “five-minute WebEx training.” For her, the primary benefit is the ability to reduce the time needed to make a decision from one day to one hour.
Similar results were reported by an executive at Sara Lee. He said he loaded 290 million to 300 million rows of production data into Explorer. He deployed the software in three days and gave it to business users without providing any training. They took to it immediately.
Both agreed that with traditional tools, you may spend half your life on performance tuning. Given the speed of Explorer, there is no need for tuning.
What can you explore with Explorer?
One of the criticisms I had of Polestar and SAP’s Business Intelligence Accelerator was that they lacked applications or templates. Okay, so I can load a billion records, but what can I do with it?
While neither customer went into too much detail as to how the product is actually used, it’s not too hard to imagine businesspeople deploying the tool to instantly calculate customer profitability by product or region, compare forecasts to actual results, or argue for or against various SKU rationalization proposals based on data, not instinct.
In a meeting with SAP Business Objects’ CEO John Schwarz, I told him that I thought Explorer would make a great platform for third-party applications like Jonova’s business planning software. Imagine having the power and data needed to simulate the impact of moving to direct store delivery or to load point-of-sale (POS) and demand data from thousands of retail points and plan real-time replenishment strategies based on balancing costs and demand. If you can model it, you can make it happen. Of course, this would involve publishing the application programming interfaces. I’m not sure where that fits on the roadmap.
Clouds and SaaS
While none of the SAP executives talked specifically about a cloud version, I found an interesting set of PDF slides and a preview of “Explorer in the cloud” on the SAP Developer Network. The latter is available at https://create.ondemand.com/explorer
Mr. Apotheker’s keynote also featured one slide on SaaS. For large enterprises, SAP currently supports CRM, strategic sourcing, business intelligence, and carbon management. The latter comes from the acquisition of ClearStandards on the eve of SAPPHIRE. In the soon timeframe, SAP promised human capital management and expense management.
As you might imagine, we had a lot of questions. We were hoping to talk to SAP’s John Wookey during SAPPHIRE, but couldn’t get our schedules to mesh. Look for more next Monday.
SAP Business ByDesign: “Go on the offensive big time” in 2010
Jim Shepherd and I went to the exhibit floor to test-drive SAP Business ByDesign, SAP’s first entry into ERP as a service. The company has capped usage to 80 or so companies as it works on guaranteeing sub-second responses to transaction-intensive processes, improving the ease-of-use, adding more functionality, and figuring out how to make money in SaaS.
In my one-on-one meeting with Mr. Apotheker, he told me that if all goes well with the next release, SAP “will go on the offensive big time in 2010.” That should coincide with when he expects the economy to recovery.
He also said that SAP planned to sell Business ByDesign back into the customer base. The challenge has been the customers’ expectation that it will have all of the global functionality needed.
Two new topics for SAPPHIRE ’10?
In keeping with our tradition of offering unsolicited advice, here are two ideas for the next SAPPHIRE: the redesign or replacement of NetWeaver and a new holistic focus on marketing SAP services and support.
The idea that NetWeaver may need a refresh won’t create headlines. As one executive told me, “The time of the fridge is over.” The fridge is a reference to the refrigerator-like look of the NetWeaver product set. Over the next 12 months, SAP will likely embrace more third-party products such as Microsoft SharePoint, IBM WebSphere, and other application servers and integration products.
SAP will also need to get more aggressive on mobility. While I love my BlackBerry, it’s not the only smartphone. The company will also need to add a lot more capability around presence or location-based applications: Where are my people, and what’s the best way to reach them? Should I use IM, e-mail, phone, videoconferencing, or call the pro shop and ask them to find their golf cart?
While no application company seems to do a good job of selling and marketing their services and support offerings, the problem seems especially acute at SAP. One of Mr. Apotheker’s first moves when he assumes the sole CEO role on Tuesday should be to announce the search for a marketing executive responsible for all of SAP’s service and support offerings.
Maybe it’s me, but the service and support offerings seem to consist of pieces: Solution Manager, Value Engineering, Enterprise Support, MaxAttention, Run SAP, SDN, product documentation, consulting, implementation support, and the like. Someone needs to tie all of the offerings together in a clear, consistent package, and get customers to use them. We continue to be astonished by the large number of SAP customers that don’t use Solution Manager, Value Engineering, or SDN.
As if the job wasn’t daunting enough, the new person should also be responsible for making sure that the support tools are easy to use, and not be content that they are good enough.
Selling services and support will become increasing important as more of the lifecycle management burden falls on SAP. Many large customers will likely come to see SAP as their enterprise architect even in heterogeneous environments.
What do you think?
Will we see a battle royale emerge between SAP BusinessObjects Explorer and Oracle Exadata in the database appliance market? How do you rate SAP’s odds for success in SaaS? Is it serious about on demand? Can it displace best of breed? If you were redesigning the NetWeaver fridge, which features would you add or drop?
As always, I welcome your feedback and ideas— brichardson@amrresearch.com. Please visit my blog at http://blogs.amrresearch.com/enterprisesoftware.
--------------------------------------------------------------------------------
© Copyright 2009 by AMR Research, Inc.
Wednesday, April 29, 2009
SAP sales drop by a third
SAP sales drop by a third
By Gerrit Wiesmann in Frankfurt
Published: April 29 2009 18:14 | Last updated: April 29 2009 18:14
SAP, the world’s largest maker of business software, said sales fell by a third in the first quarter of 2009, highlighting companies’ reluctance to invest in information technology during a recession.
The slump was bigger than the 12 per cent drop in sales of such programs reported by rival Oracle in March. It led investors to sell SAP stock, although the shares rallied to close only 2 per cent lower at €29.50.
The German company said software sales dropped by a third to €418m ($557m). However, it managed to make up for this by raising revenues from maintaining SAP software installed on customers’ computers.
As a result, software and related services revenues were unchanged at €1.74m, outperforming Oracle, which saw joint revenues sink 2 per cent in its third quarter, which ran until the end of February.
For the full year, SAP said it continued to work on the “assumption” that software and related services revenues would be flat or fall by 1 per cent, allowing it to meet an operating-margin target of between 24.5 per cent and 25.5 per cent.
“While visibility for software revenues remains limited, we continue to take steps to protect our margin in this tough operating environment,” Léo Apotheker, SAP’s co-chief executive, said.
Mr Apotheker added that he was not worried by Oracle’s better performance in selling software at the start of 2009. SAP’s position as market leader was “not substantially changed” by what would prove to be a normal quarterly blip, he said.
Mr Apotheker signalled he did not want to follow Oracle into the hardware business after the US group agreed to buy server maker Sun. However, SAP’s strategy of organic growth would still be flanked by add-on purchases.
Mr Apotheker takes sole responsibility for SAP next month when his current co-chief executive Henning Kagermann retires.
SAP saw double-digit sales growth for much of 2008 – and an annual operating margin of 28.2 per cent – and it said as late as last summer that the crisis could be a boon as clients looked to cut costs with new software.
Yet, in autumn, the company warned that the fall-out from the global recession meant it could not give a sales forecast for 2009. Cost cuts – including a pay freeze and jobs cuts – followed.
SAP is cutting jobs for the first time in its 37-year history, aiming to reduce its workforce by 3,000 – 6 per cent of staff – to 48,500 by late 2009. Some 2,200 of these posts were cut last quarter.
This led to a one-off restructuring charge of €160m in the first three months of 2009, helping to drag operating income down 8 per cent to €332m.
Net income hit €204m, down 16 per cent from the first quarter of 2008.
Copyright The Financial Times Limited 2009
By Gerrit Wiesmann in Frankfurt
Published: April 29 2009 18:14 | Last updated: April 29 2009 18:14
SAP, the world’s largest maker of business software, said sales fell by a third in the first quarter of 2009, highlighting companies’ reluctance to invest in information technology during a recession.
The slump was bigger than the 12 per cent drop in sales of such programs reported by rival Oracle in March. It led investors to sell SAP stock, although the shares rallied to close only 2 per cent lower at €29.50.
The German company said software sales dropped by a third to €418m ($557m). However, it managed to make up for this by raising revenues from maintaining SAP software installed on customers’ computers.
As a result, software and related services revenues were unchanged at €1.74m, outperforming Oracle, which saw joint revenues sink 2 per cent in its third quarter, which ran until the end of February.
For the full year, SAP said it continued to work on the “assumption” that software and related services revenues would be flat or fall by 1 per cent, allowing it to meet an operating-margin target of between 24.5 per cent and 25.5 per cent.
“While visibility for software revenues remains limited, we continue to take steps to protect our margin in this tough operating environment,” Léo Apotheker, SAP’s co-chief executive, said.
Mr Apotheker added that he was not worried by Oracle’s better performance in selling software at the start of 2009. SAP’s position as market leader was “not substantially changed” by what would prove to be a normal quarterly blip, he said.
Mr Apotheker signalled he did not want to follow Oracle into the hardware business after the US group agreed to buy server maker Sun. However, SAP’s strategy of organic growth would still be flanked by add-on purchases.
Mr Apotheker takes sole responsibility for SAP next month when his current co-chief executive Henning Kagermann retires.
SAP saw double-digit sales growth for much of 2008 – and an annual operating margin of 28.2 per cent – and it said as late as last summer that the crisis could be a boon as clients looked to cut costs with new software.
Yet, in autumn, the company warned that the fall-out from the global recession meant it could not give a sales forecast for 2009. Cost cuts – including a pay freeze and jobs cuts – followed.
SAP is cutting jobs for the first time in its 37-year history, aiming to reduce its workforce by 3,000 – 6 per cent of staff – to 48,500 by late 2009. Some 2,200 of these posts were cut last quarter.
This led to a one-off restructuring charge of €160m in the first three months of 2009, helping to drag operating income down 8 per cent to €332m.
Net income hit €204m, down 16 per cent from the first quarter of 2008.
Copyright The Financial Times Limited 2009
Software sales fall by a third at SAP
Software sales fall by a third at SAP
By Gerrit Wiesmann in Frankfurt
Published: April 29 2009 07:53 | Last updated: April 29 2009 07:53
SAP, the world’s largest maker of business software, on Wednesday painted a bleak picture of corporate spending on information technology when it said that sales of new software fell by a third in the first quarter of the year.
The Walldorf-based company said software sales – an indicator of follow-on sales from upgrades and maintenance – dropped 33 per cent to €418m, while software and maintenance revenues were flat at €1.74bn.
Last year, SAP regularly reported double-digit growth in both positions and last summer still boasted the economic crisis could raise information-technology spending as its clients looked to cut costs with new software.
But last autumn the company suddenly gave a stark warning about the fall-out of the global recession and said it could not give a sales forecast for 2009. Cost cuts, including a pay freeze and jobs cuts, soon followed.
“While visibility for software revenues remains limited, we continue to take steps to protect our margin in this tough operating environment,” Léo Apotheker, SAP’s co-chief executive said in a statement on Wednesday.
He stuck to his pledge, made at the start of the year, that cost cuts would help SAP to achieve an operating margin of 24.5-25.5 per cent in 2009, albeit down from a profit margin of 28.2 per cent the prior year.
SAP said this forecast was based on “the assumption” that full-year revenues from software and related services would be “flat” or show “a decline of 1 per cent” – although it said this was not a formal sales target.
The company is cutting jobs for the first time in its 37-year history, aiming to reduce its workforce by 3,000 people, some 6 per cent of total staff, to 48,500 by the end of 2009. Some 2,200 posts were cut last quarter.
This led to a one-off restructuring charge of €160m in the first three months of the year, helping to drag operating income down 8 per cent to €332m. Net income hit €204m, down 16 per cent from quarter one 2008.
Mr Apotheker, who takes sole responsibility of SAP when co-ceo Henning Kagermann retires later this month, said cost cuts were starting to have an effect and pledged SAP would continue with “tight cost controls.”
Copyright The Financial Times Limited 2009
"FT" and "Financial Times" are trademarks of the Financial Times. Privacy policy | Terms
© Copyright The Financial Times Ltd 2009.
By Gerrit Wiesmann in Frankfurt
Published: April 29 2009 07:53 | Last updated: April 29 2009 07:53
SAP, the world’s largest maker of business software, on Wednesday painted a bleak picture of corporate spending on information technology when it said that sales of new software fell by a third in the first quarter of the year.
The Walldorf-based company said software sales – an indicator of follow-on sales from upgrades and maintenance – dropped 33 per cent to €418m, while software and maintenance revenues were flat at €1.74bn.
Last year, SAP regularly reported double-digit growth in both positions and last summer still boasted the economic crisis could raise information-technology spending as its clients looked to cut costs with new software.
But last autumn the company suddenly gave a stark warning about the fall-out of the global recession and said it could not give a sales forecast for 2009. Cost cuts, including a pay freeze and jobs cuts, soon followed.
“While visibility for software revenues remains limited, we continue to take steps to protect our margin in this tough operating environment,” Léo Apotheker, SAP’s co-chief executive said in a statement on Wednesday.
He stuck to his pledge, made at the start of the year, that cost cuts would help SAP to achieve an operating margin of 24.5-25.5 per cent in 2009, albeit down from a profit margin of 28.2 per cent the prior year.
SAP said this forecast was based on “the assumption” that full-year revenues from software and related services would be “flat” or show “a decline of 1 per cent” – although it said this was not a formal sales target.
The company is cutting jobs for the first time in its 37-year history, aiming to reduce its workforce by 3,000 people, some 6 per cent of total staff, to 48,500 by the end of 2009. Some 2,200 posts were cut last quarter.
This led to a one-off restructuring charge of €160m in the first three months of the year, helping to drag operating income down 8 per cent to €332m. Net income hit €204m, down 16 per cent from quarter one 2008.
Mr Apotheker, who takes sole responsibility of SAP when co-ceo Henning Kagermann retires later this month, said cost cuts were starting to have an effect and pledged SAP would continue with “tight cost controls.”
Copyright The Financial Times Limited 2009
"FT" and "Financial Times" are trademarks of the Financial Times. Privacy policy | Terms
© Copyright The Financial Times Ltd 2009.
Friday, April 17, 2009
SAP’s New CEO to Inherit Far More Complex Product Set
Friday, April 17, 2009
Bruce Richardson
On April 29, SAP will host a conference call to discuss its results for the first quarter ending March 31. The company is also expected to announce that Henning Kagermann will be retiring from his role as Co-CEO. Fellow Co-CEO Léo Apotheker will assume the top position.
Knowing Mr. Kagermann, I bet he would have preferred to leave his successor with a strong pipeline and a robust economy as he slips quietly away. During a brief conversation a few weeks ago, I asked him whether he expected to see the economy recover by the end of this year or if we would we have to wait for 2010. Mr. Kagermann said that he thought “we will be lucky if it’s 2010.”
Over the last few weeks, I’ve sat through a lot of product discussions with various SAP executives and dozens of the company’s largest customers. Based on my observations, Mr. Apotheker faces numerous challenges. The top one may be the increasing complexity of the company’s product line and strategy. Here are some observations.
Surprise! Separate Enhancement Packs for ERP and each New Dimension product
When I attended the SAP Business Suite 7.0 launch in February, I left believing that all of the company’s new products would be delivered through an annual Enhancement Pack that covered the whole product spectrum. As it turns out, there will be separate packs for ERP and each of the New Dimension products. (The latter is an old label that refers to SAP’s offerings for CRM, SCM, HCM, and SRM.)
In addition, each release is cumulative, meaning that Enhancement Pack 5 will contain all of the features included in the previous packs. While this is great news for vendors like IntelliCorp and Panaya, which offer tools to help buyers compare the new releases with the current versions, it adds a lot more complexity to large implementations. This is especially true if SAP reverts back to separate release schedules for each of the various New Dimension products.
At the launch, SAP also introduced the concept of value scenarios. If you read my piece, “A Closer Look at the New SAP Business Suite,” you may remember that SAP had created 30+ vertical-specific scenarios based on end-to-end business processes, including inspired shopping experience, integrated product development, and collaborative demand and supply planning.
These scenarios are more like frameworks than composite apps. Still, a scenario such as collaborate demand and supply planning could involve pulling data from CRM and supply chain management in order to create the end-to-end process. This builds in a level of dependence on synchronized product releases. This is a challenge giving that SAP software is developed in 10 or 11 labs around the world.
Three types of apps: transactional, analytical, and collaborative
SAP has quietly built in additional complexity by adding different types of applications. In the R/3 days, its world consisted of transactions, with all of the results stored in a database.
Then, SAP developed and acquired a set of business intelligence/performance management products that pulled data from multiple data sources and content types, both structured and unstructured. The latter creates an issue when you see the world as a set of transactions. For example, what do you do with unstructured data? Where do you store it?
With the acquisition of Business Objects, SAP will be offering far more powerful and complex tools capable of managing enormous volumes of real-time data. This will likely result in a lot more members in the Terabyte Club, a moniker created by AMR Research’s Derek Prior.
Returning to the collaborative demand and supply planning scenario, these new collaborative apps offer a different challenge. In this application, SAP envisions a sort of a heterogeneous trading hub where a manufacturer may be exchanging real-time data with customers, suppliers, third-party logistics firms, contract manufacturers, financial institutions, regulatory agencies, and other interested parties.
The combination of the three types of applications, higher data volumes, and increased transactions is putting more pressure on SAP to open up NetWeaver to support third-party products. Discussions with customers, software vendors, and former employees point to the need for improving or replacing SAP NetWeaver Process Integration (PI). Formerly known as XI, PI is SAP’s enterprise application integration toolset.
Add SaaS and cloud to the soup
While SAP has been relatively quiet about its plans for expanding its on demand and software-as-a-service (SaaS) products beyond CRM and SRM, it’s logical to assume that over the next three to five years, most companies will find themselves support a hybrid architecture consisting of traditional on premise deployments and the rapidly growing on demand software.
Then there is the subject of cloud computing. A few weeks ago we spoke with SAP CTO Vishal Sikka about his plans. He told us that his team has been “working with Amazon for some time.” Logical cloud offerings include backup and archive, support for test and demo systems, and some virtualization support. In terms of offering applications on the cloud, Dr. Sikka pointed to several issues that need to be resolved: lack of analytics, integration challenges, and the difficulty of supporting transaction-intensive functions such as available to promise.
Urgent need for product roadmaps spanning two to five years
So, as you imagine the challenge of mixing and matching transactional, analytical, and collaborative applications in some combination of on premise, on demand, and in the cloud, you can feel the CIO’s pain. Clearly, CIOs have a lot more work ahead on governance, master data management, insourcing/outsourcing, and taming the total cost of ownership.
In meetings with SAP customers, we usually hear the same request unanimously: “Please help get SAP to provide us with product roadmaps.” Most are trying to slot in new, bite-sized projects over a multiyear period. This is much harder when you don’t know the release schedules. To date, SAP has been reluctant to disclose detailed plans. When we push back, the answer usually revolves around revenue recognition concerns. Okay, but that’s not very helpful for customers.
We will plead your case to Mr. Apotheker at SAPPHIRE
The next time we see Mr. Apotheker will be at SAPPHIRE in Orlando (May 11–14). In the past, Jim Shepherd and I have had the opportunities for one-on-one chats with Mr. Kagermann, Mr. Apotheker, and other SAP board members. Assuming that tradition holds, I promise we will relay your requests for detailed roadmaps for user interface plans, applications, NetWeaver, Business Objects, SaaS and clouds, and implementation strategies. Would you like more guidance on pricing, too?
We will also ask him about the economy. I hope he’s a lot more optimistic than his soon-to-be former boss. Look for our analysis next month.
On my blog, we are also looking for your view on your interest in new research on the future of work. Please take a minute to read the posts and add your thoughts.
In the meantime, I welcome your feedback and ideas—brichardson@amrresearch.com
Bruce Richardson
On April 29, SAP will host a conference call to discuss its results for the first quarter ending March 31. The company is also expected to announce that Henning Kagermann will be retiring from his role as Co-CEO. Fellow Co-CEO Léo Apotheker will assume the top position.
Knowing Mr. Kagermann, I bet he would have preferred to leave his successor with a strong pipeline and a robust economy as he slips quietly away. During a brief conversation a few weeks ago, I asked him whether he expected to see the economy recover by the end of this year or if we would we have to wait for 2010. Mr. Kagermann said that he thought “we will be lucky if it’s 2010.”
Over the last few weeks, I’ve sat through a lot of product discussions with various SAP executives and dozens of the company’s largest customers. Based on my observations, Mr. Apotheker faces numerous challenges. The top one may be the increasing complexity of the company’s product line and strategy. Here are some observations.
Surprise! Separate Enhancement Packs for ERP and each New Dimension product
When I attended the SAP Business Suite 7.0 launch in February, I left believing that all of the company’s new products would be delivered through an annual Enhancement Pack that covered the whole product spectrum. As it turns out, there will be separate packs for ERP and each of the New Dimension products. (The latter is an old label that refers to SAP’s offerings for CRM, SCM, HCM, and SRM.)
In addition, each release is cumulative, meaning that Enhancement Pack 5 will contain all of the features included in the previous packs. While this is great news for vendors like IntelliCorp and Panaya, which offer tools to help buyers compare the new releases with the current versions, it adds a lot more complexity to large implementations. This is especially true if SAP reverts back to separate release schedules for each of the various New Dimension products.
At the launch, SAP also introduced the concept of value scenarios. If you read my piece, “A Closer Look at the New SAP Business Suite,” you may remember that SAP had created 30+ vertical-specific scenarios based on end-to-end business processes, including inspired shopping experience, integrated product development, and collaborative demand and supply planning.
These scenarios are more like frameworks than composite apps. Still, a scenario such as collaborate demand and supply planning could involve pulling data from CRM and supply chain management in order to create the end-to-end process. This builds in a level of dependence on synchronized product releases. This is a challenge giving that SAP software is developed in 10 or 11 labs around the world.
Three types of apps: transactional, analytical, and collaborative
SAP has quietly built in additional complexity by adding different types of applications. In the R/3 days, its world consisted of transactions, with all of the results stored in a database.
Then, SAP developed and acquired a set of business intelligence/performance management products that pulled data from multiple data sources and content types, both structured and unstructured. The latter creates an issue when you see the world as a set of transactions. For example, what do you do with unstructured data? Where do you store it?
With the acquisition of Business Objects, SAP will be offering far more powerful and complex tools capable of managing enormous volumes of real-time data. This will likely result in a lot more members in the Terabyte Club, a moniker created by AMR Research’s Derek Prior.
Returning to the collaborative demand and supply planning scenario, these new collaborative apps offer a different challenge. In this application, SAP envisions a sort of a heterogeneous trading hub where a manufacturer may be exchanging real-time data with customers, suppliers, third-party logistics firms, contract manufacturers, financial institutions, regulatory agencies, and other interested parties.
The combination of the three types of applications, higher data volumes, and increased transactions is putting more pressure on SAP to open up NetWeaver to support third-party products. Discussions with customers, software vendors, and former employees point to the need for improving or replacing SAP NetWeaver Process Integration (PI). Formerly known as XI, PI is SAP’s enterprise application integration toolset.
Add SaaS and cloud to the soup
While SAP has been relatively quiet about its plans for expanding its on demand and software-as-a-service (SaaS) products beyond CRM and SRM, it’s logical to assume that over the next three to five years, most companies will find themselves support a hybrid architecture consisting of traditional on premise deployments and the rapidly growing on demand software.
Then there is the subject of cloud computing. A few weeks ago we spoke with SAP CTO Vishal Sikka about his plans. He told us that his team has been “working with Amazon for some time.” Logical cloud offerings include backup and archive, support for test and demo systems, and some virtualization support. In terms of offering applications on the cloud, Dr. Sikka pointed to several issues that need to be resolved: lack of analytics, integration challenges, and the difficulty of supporting transaction-intensive functions such as available to promise.
Urgent need for product roadmaps spanning two to five years
So, as you imagine the challenge of mixing and matching transactional, analytical, and collaborative applications in some combination of on premise, on demand, and in the cloud, you can feel the CIO’s pain. Clearly, CIOs have a lot more work ahead on governance, master data management, insourcing/outsourcing, and taming the total cost of ownership.
In meetings with SAP customers, we usually hear the same request unanimously: “Please help get SAP to provide us with product roadmaps.” Most are trying to slot in new, bite-sized projects over a multiyear period. This is much harder when you don’t know the release schedules. To date, SAP has been reluctant to disclose detailed plans. When we push back, the answer usually revolves around revenue recognition concerns. Okay, but that’s not very helpful for customers.
We will plead your case to Mr. Apotheker at SAPPHIRE
The next time we see Mr. Apotheker will be at SAPPHIRE in Orlando (May 11–14). In the past, Jim Shepherd and I have had the opportunities for one-on-one chats with Mr. Kagermann, Mr. Apotheker, and other SAP board members. Assuming that tradition holds, I promise we will relay your requests for detailed roadmaps for user interface plans, applications, NetWeaver, Business Objects, SaaS and clouds, and implementation strategies. Would you like more guidance on pricing, too?
We will also ask him about the economy. I hope he’s a lot more optimistic than his soon-to-be former boss. Look for our analysis next month.
On my blog, we are also looking for your view on your interest in new research on the future of work. Please take a minute to read the posts and add your thoughts.
In the meantime, I welcome your feedback and ideas—brichardson@amrresearch.com
Friday, January 30, 2009
SAP’s Bill McDermott Reviews SAP’s $15B Year
SAP’s Bill McDermott Reviews SAP’s $15B Year
Friday, January 30, 2009
Bruce Richardson
On Wednesday, January 28, SAP AG hosted an early morning conference call to discuss results for the fourth quarter and year-ending December 31. Total GAAP revenue for the fourth quarter was Euro 3.488B (or $4.58B based on the 1.314 exchange rate), up 8% from the year earlier period. Full-year GAAP revenue came in Euro 11.567B ($15.199B), up 13% over FY07. Investors appeared relieved by the relatively positive news and bid the stock up nearly 6% in trading that day.
Putting performance aside, nearly all of the news coverage focused on the company’s plans to eliminate 3,000 jobs this year. SAP ended 2008 with 51,536 employees, up 7,675 or 17.5% from the end of 2007. Most of the increase came from the 6,224 employees added in the Business Objects acquisition, which closed last January.
During the earnings call, SAP said that the head-count reduction began last quarter with the elimination of 327 positions. Executives estimate that the 2009 cuts will save the company approximately Euro 300M–350M ($397.5M–$463.7M).
Inside 4Q performance with Bill McDermott
With the broadcast of the earnings call on in the background, our attention was focused on our quarterly call with Bill McDermott, SAP’s president of global field operations. As usual, he was in a very upbeat mood despite a challenging economy that put pressure on deal pricing and nearly eliminated any purchases by first-time buyers.
We opened with a discussion of results by geography. Mr. McDermott said that “Latin America grew very well;” EMEA and Asia-Pacific Japan did “well;” Canada was “great;” and the United States just “OK.” In Europe, “Russia struggled,” while results in Italy and France were “particularly strong.”
BRIC countries: “All have challenges”
The mention of Russia prompted us to ask about the other BRIC (Brazil, Russia, India, and China) countries. He said that “all have challenges.” There are currency and liquidity issues in Brazil. For Russian companies access to capital has become more difficult. Indian sales were slower due to the terrorist attacks in Mumbai. Fortunately, China “remains strong.”
From regions we traversed to verticals. He said SAP’s results were “reasonably balanced” across industries. Retail was “slower” with the exception of software for pricing and margin management. Despite the negative publicity surrounding their industry, banks are still buying software, pointing to good results in Colombia and good penetration of Business Objects into the “mature U.S. banks.” He said that SAP had also been successful selling Business Objects and trade promotion management software to consumer packaged goods (CPG) companies.
Overall, Business Objects has been a “significant contributor,” having replaced more than 600 competitive implementations in SAP accounts. Business Objects is also gaining traction in the area of governance, risk, and compliance (GRC)—“it’s rocking.”
In terms of other products, Mr. McDermott said that the new version of CRM was “doing very well” as buyers use it to get closer to their existing customers.
We delicately brought up the issue of head-count reduction. I told Mr. McDermott that many software companies, including SAP partners, have been telling us that more SAP sales talent had become available due to end of the year job cuts. He said the rumors were unfounded and repeated SAP’s plans to lower head count through attrition.
The conversation shifted to deal flow. Looking at 2008 results versus the year earlier period, Mr. McDermott said that “20% of revenue came from larger transactions, 45% from smaller transactions, and 35% from midsized transactions.” With the downward pressure on prices, SAP “needs to do more volume.”
New SAP product launch on February 4
Mr. McDermott is hoping that the next release of the SAP Business Suite will help to increase the sales volume. The launch is taking place on Wednesday at the company’s offices in Manhattan. When asked for a preview, he described the new software as “the most harmonizing, efficient, feature-rich software” that SAP has developed.
The teaser about the new product marked the end of the call. That was too bad as we still had more questions. We’ll have a chance to ask them at next week’s event. Jim Shepherd and I will be in New York for the launch. Look for our analysis next week.
On the blog: How Do You Think SAP Will Perform in 2009?
As always, we welcome your feedback and ideas at our blog. We pose some questions there about SAP’s 2009, including:
“If I ran SAP, my next major acquisition would be __________. And, here’s why _____________.”
Let us know your answers there
--------------------------------------------------------------------------------
© Copyright by AMR Research, Inc.
Friday, January 30, 2009
Bruce Richardson
On Wednesday, January 28, SAP AG hosted an early morning conference call to discuss results for the fourth quarter and year-ending December 31. Total GAAP revenue for the fourth quarter was Euro 3.488B (or $4.58B based on the 1.314 exchange rate), up 8% from the year earlier period. Full-year GAAP revenue came in Euro 11.567B ($15.199B), up 13% over FY07. Investors appeared relieved by the relatively positive news and bid the stock up nearly 6% in trading that day.
Putting performance aside, nearly all of the news coverage focused on the company’s plans to eliminate 3,000 jobs this year. SAP ended 2008 with 51,536 employees, up 7,675 or 17.5% from the end of 2007. Most of the increase came from the 6,224 employees added in the Business Objects acquisition, which closed last January.
During the earnings call, SAP said that the head-count reduction began last quarter with the elimination of 327 positions. Executives estimate that the 2009 cuts will save the company approximately Euro 300M–350M ($397.5M–$463.7M).
Inside 4Q performance with Bill McDermott
With the broadcast of the earnings call on in the background, our attention was focused on our quarterly call with Bill McDermott, SAP’s president of global field operations. As usual, he was in a very upbeat mood despite a challenging economy that put pressure on deal pricing and nearly eliminated any purchases by first-time buyers.
We opened with a discussion of results by geography. Mr. McDermott said that “Latin America grew very well;” EMEA and Asia-Pacific Japan did “well;” Canada was “great;” and the United States just “OK.” In Europe, “Russia struggled,” while results in Italy and France were “particularly strong.”
BRIC countries: “All have challenges”
The mention of Russia prompted us to ask about the other BRIC (Brazil, Russia, India, and China) countries. He said that “all have challenges.” There are currency and liquidity issues in Brazil. For Russian companies access to capital has become more difficult. Indian sales were slower due to the terrorist attacks in Mumbai. Fortunately, China “remains strong.”
From regions we traversed to verticals. He said SAP’s results were “reasonably balanced” across industries. Retail was “slower” with the exception of software for pricing and margin management. Despite the negative publicity surrounding their industry, banks are still buying software, pointing to good results in Colombia and good penetration of Business Objects into the “mature U.S. banks.” He said that SAP had also been successful selling Business Objects and trade promotion management software to consumer packaged goods (CPG) companies.
Overall, Business Objects has been a “significant contributor,” having replaced more than 600 competitive implementations in SAP accounts. Business Objects is also gaining traction in the area of governance, risk, and compliance (GRC)—“it’s rocking.”
In terms of other products, Mr. McDermott said that the new version of CRM was “doing very well” as buyers use it to get closer to their existing customers.
We delicately brought up the issue of head-count reduction. I told Mr. McDermott that many software companies, including SAP partners, have been telling us that more SAP sales talent had become available due to end of the year job cuts. He said the rumors were unfounded and repeated SAP’s plans to lower head count through attrition.
The conversation shifted to deal flow. Looking at 2008 results versus the year earlier period, Mr. McDermott said that “20% of revenue came from larger transactions, 45% from smaller transactions, and 35% from midsized transactions.” With the downward pressure on prices, SAP “needs to do more volume.”
New SAP product launch on February 4
Mr. McDermott is hoping that the next release of the SAP Business Suite will help to increase the sales volume. The launch is taking place on Wednesday at the company’s offices in Manhattan. When asked for a preview, he described the new software as “the most harmonizing, efficient, feature-rich software” that SAP has developed.
The teaser about the new product marked the end of the call. That was too bad as we still had more questions. We’ll have a chance to ask them at next week’s event. Jim Shepherd and I will be in New York for the launch. Look for our analysis next week.
On the blog: How Do You Think SAP Will Perform in 2009?
As always, we welcome your feedback and ideas at our blog. We pose some questions there about SAP’s 2009, including:
“If I ran SAP, my next major acquisition would be __________. And, here’s why _____________.”
Let us know your answers there
--------------------------------------------------------------------------------
© Copyright by AMR Research, Inc.
Wednesday, January 28, 2009
SAP to cut 3,000 staff amid gloomy outlook
SAP to cut 3,000 staff amid gloomy outlook
By Gerrit Wiesmann in Frankfurt
Published: January 28 2009 09:37 | Last updated: January 28 2009 09:37
SAP, the world’s largest maker of software used by businesses, on Wednesday said it would cut 3,000 staff, nearly 6 per cent of its workforce, as it expects revenues to fall this year from software sales, web services and maintenance software.
Léo Apotheker, co-chief executive, said the first job cuts in the German company’s history were a result of the “very exceptional” economic crisis.
SAP said it would incur restructuring costs of €200m-€300m ($265m-$397m) as a result of the cuts, while its sales margin would fall by three points to 24.5-25.5 per cent in 2009 as companies pulled back on software spending.
SAP’s intention to cut personnel costs comes a week after Microsoft announced its first job cuts. It shows how even software companies that found shelter from the dotcom bust are being rocked by the downturn.
The Walldorf-based company did manage to hit the full-year targets for 2008 that it set for itself in October, though these were well below initial goals for a year that Mr Apotheker had until late summer expected to turn in record profits.
SAP saw return on sales rise to 28.2 per cent from 27.3 per cent due to emergency cost cuts of €220m and full-year software and services sales of €8.6bn – a rise of 16 per cent, or 20 per cent when adjusted for currency moves.
“This year we expect to see software and software-related service sales at the 2008 level or slightly below,” Mr Apotheker said.
As a result, this autumn’s programme of cost cuts would go on and expand to include job cuts.
Mr Apotheker said the economic crisis had wrecked SAP’s initial goal of raising revenues from software sales, subscriptions and maintenance by 27 per cent to €9bn.
The year-end shocks saw companies spend less on applications, with SAP’s fourth quarter software sales falling 7 per cent to €1.3bn. Software and service revenues rose 9 per cent to €2.7bn thanks only to maintenance contracts.
Fourth quarter operating income rose 22 per cent to €1.4bn, almost entirely the result of cuts announced in October. This helped boost annual operating income 18 per cent to €3.3bn and net profit by 14 per cent to €2.2bn.
Mr Apotheker and co-chief executive Henning Kagermann expect SAP to emerge in better shape, not least as a result of annual personnel cost savings of up to €350m in and beyond 2010.
Copyright The Financial Times Limited 2009
"FT" and "Financial Times" are trademarks of the Financial Times. Privacy policy | Terms
© Copyright The Financial Times Ltd 2009.
By Gerrit Wiesmann in Frankfurt
Published: January 28 2009 09:37 | Last updated: January 28 2009 09:37
SAP, the world’s largest maker of software used by businesses, on Wednesday said it would cut 3,000 staff, nearly 6 per cent of its workforce, as it expects revenues to fall this year from software sales, web services and maintenance software.
Léo Apotheker, co-chief executive, said the first job cuts in the German company’s history were a result of the “very exceptional” economic crisis.
SAP said it would incur restructuring costs of €200m-€300m ($265m-$397m) as a result of the cuts, while its sales margin would fall by three points to 24.5-25.5 per cent in 2009 as companies pulled back on software spending.
SAP’s intention to cut personnel costs comes a week after Microsoft announced its first job cuts. It shows how even software companies that found shelter from the dotcom bust are being rocked by the downturn.
The Walldorf-based company did manage to hit the full-year targets for 2008 that it set for itself in October, though these were well below initial goals for a year that Mr Apotheker had until late summer expected to turn in record profits.
SAP saw return on sales rise to 28.2 per cent from 27.3 per cent due to emergency cost cuts of €220m and full-year software and services sales of €8.6bn – a rise of 16 per cent, or 20 per cent when adjusted for currency moves.
“This year we expect to see software and software-related service sales at the 2008 level or slightly below,” Mr Apotheker said.
As a result, this autumn’s programme of cost cuts would go on and expand to include job cuts.
Mr Apotheker said the economic crisis had wrecked SAP’s initial goal of raising revenues from software sales, subscriptions and maintenance by 27 per cent to €9bn.
The year-end shocks saw companies spend less on applications, with SAP’s fourth quarter software sales falling 7 per cent to €1.3bn. Software and service revenues rose 9 per cent to €2.7bn thanks only to maintenance contracts.
Fourth quarter operating income rose 22 per cent to €1.4bn, almost entirely the result of cuts announced in October. This helped boost annual operating income 18 per cent to €3.3bn and net profit by 14 per cent to €2.2bn.
Mr Apotheker and co-chief executive Henning Kagermann expect SAP to emerge in better shape, not least as a result of annual personnel cost savings of up to €350m in and beyond 2010.
Copyright The Financial Times Limited 2009
"FT" and "Financial Times" are trademarks of the Financial Times. Privacy policy | Terms
© Copyright The Financial Times Ltd 2009.
Wednesday, November 19, 2008
What’s new: SAP sees opportunity (FT.com)
What’s new: SAP sees opportunity
By Geoff Nairn
Published: November 19 2008 10:50 | Last updated: November 19 2008 10:50
Times are hard and while some vendors see only challenges, SAP sees opportunities. The German giant has designed a new range of software to help cash-strapped businesses shore up their bottom line through greater operational efficiencies and cost savings.
Called Best-Run Now, these offerings cover areas such as energy management, procurement, cash and risk management, workforce management and business planning. Rounding out the range is a business intelligence ”accelerator” and a package for reducing IT operational costs.
Office productivity
Another product for today’s cost-conscious times: IBM is pushing Lotus Symphony, its reborn office productivity suite, as a free and open source alternative to Microsoft Office.
IBM is particularly keen to win over businesses with lots of ”task users”, who perhaps do not need the sprawling functionality of Office. Unlike Lotus SmartSuite, its predecessor, Symphony is free and is based on OpenOffice, so it is compatible with Microsoft Office. IBM also released a beta version of Symphony for the Apple Mac.
Fujitsu foothold
Fujitsu may not be a household name to enterprise customers outside Japan. But that could change with Siemens’ decision to sell Fujitsu its half share in their long-running joint venture, Fujitsu Siemens Computers. Fujitsu hopes the move will gain it a bigger foothold in Europe for its high-end hardware, the latest being the Sparc Enterprise M2000, an entry-level server based on the quad-core Sparc64 VII processor, which Sun also uses. Pricing starts at $15,000 for an M2000 running Sun Solaris 10.
Audit automated
Compliance can be a real headache for IT departments. Sun claims to have the remedy in Sun Identity Compliance Manager, which seeks to automate the time-consuming tasks associated with controlling, reporting and auditing who has access to what data and applications inside an organisation. Pricing starts $75,000 plus an undisclosed small fee for each user.
Configuration automated
More on the compliance front, this time from storage giant EMC. Its Server Configuration Manager product lets IT departments automatically discover and maintain detailed server configuration data, and includes pre-packaged compliance toolkits for regulations such as Sox, Hipaa and others. Companion product, EMC Configuration Analytics Manager, turns this raw data into useful business information on compliance and IT service levels.
Offer of protection
Sprint Nextel is offering US businesses protection from network-borne threats. As well as standard services such as web filtering, antivirus and malware scanning, Sprint’s Secure Web Protection also includes web application control, so allowing business to monitor suspect peer-to-peer or instant messaging traffic. Businesses can sign up for a network-based service or a premises-based option, which uses hardware and software from Blue Coat Systems.
Google SLA extended
It’s not quite five nines reliability, but what do you expect for $50? Google has extended the service level agreement its offers to paying users of its Gmail webmail service to cover its other hosted applications – Google Calendar, Google Docs, Google Sites and Google Talk. The SLA covers businesses and organisations that sign up for Google Apps Premier Edition, which costs $50 a year for each user. If uptime falls below 99.9 per cent, extra days are credited to the account. The free version of Google Apps does not come with an SLA.
Copyright The Financial Times Limited 2008
By Geoff Nairn
Published: November 19 2008 10:50 | Last updated: November 19 2008 10:50
Times are hard and while some vendors see only challenges, SAP sees opportunities. The German giant has designed a new range of software to help cash-strapped businesses shore up their bottom line through greater operational efficiencies and cost savings.
Called Best-Run Now, these offerings cover areas such as energy management, procurement, cash and risk management, workforce management and business planning. Rounding out the range is a business intelligence ”accelerator” and a package for reducing IT operational costs.
Office productivity
Another product for today’s cost-conscious times: IBM is pushing Lotus Symphony, its reborn office productivity suite, as a free and open source alternative to Microsoft Office.
IBM is particularly keen to win over businesses with lots of ”task users”, who perhaps do not need the sprawling functionality of Office. Unlike Lotus SmartSuite, its predecessor, Symphony is free and is based on OpenOffice, so it is compatible with Microsoft Office. IBM also released a beta version of Symphony for the Apple Mac.
Fujitsu foothold
Fujitsu may not be a household name to enterprise customers outside Japan. But that could change with Siemens’ decision to sell Fujitsu its half share in their long-running joint venture, Fujitsu Siemens Computers. Fujitsu hopes the move will gain it a bigger foothold in Europe for its high-end hardware, the latest being the Sparc Enterprise M2000, an entry-level server based on the quad-core Sparc64 VII processor, which Sun also uses. Pricing starts at $15,000 for an M2000 running Sun Solaris 10.
Audit automated
Compliance can be a real headache for IT departments. Sun claims to have the remedy in Sun Identity Compliance Manager, which seeks to automate the time-consuming tasks associated with controlling, reporting and auditing who has access to what data and applications inside an organisation. Pricing starts $75,000 plus an undisclosed small fee for each user.
Configuration automated
More on the compliance front, this time from storage giant EMC. Its Server Configuration Manager product lets IT departments automatically discover and maintain detailed server configuration data, and includes pre-packaged compliance toolkits for regulations such as Sox, Hipaa and others. Companion product, EMC Configuration Analytics Manager, turns this raw data into useful business information on compliance and IT service levels.
Offer of protection
Sprint Nextel is offering US businesses protection from network-borne threats. As well as standard services such as web filtering, antivirus and malware scanning, Sprint’s Secure Web Protection also includes web application control, so allowing business to monitor suspect peer-to-peer or instant messaging traffic. Businesses can sign up for a network-based service or a premises-based option, which uses hardware and software from Blue Coat Systems.
Google SLA extended
It’s not quite five nines reliability, but what do you expect for $50? Google has extended the service level agreement its offers to paying users of its Gmail webmail service to cover its other hosted applications – Google Calendar, Google Docs, Google Sites and Google Talk. The SLA covers businesses and organisations that sign up for Google Apps Premier Edition, which costs $50 a year for each user. If uptime falls below 99.9 per cent, extra days are credited to the account. The free version of Google Apps does not come with an SLA.
Copyright The Financial Times Limited 2008
Friday, October 31, 2008
ERP Update: Epicor, QAD, and SAP
It was a busy week for Epicor. The company posted earnings, turned down a takeover bid, and became the first ERP vendor to support Microsoft’s new Azure cloud-computing system. Here’s a look at all that news, plus an update on the Epicor 9 beta program, highlights from our briefing with QAD’s CEO Pam Lopker, and insights on a new set of products from SAP.
Friday, October 10, 2008
The Shrinking Software Middle Class
When Oracle acquired Primavera, it not only picked up a leading project management software firm with 5,000 customers, but it also eliminated one more application vendor from the “software middle class,” those vendors with annual revenue between $100M and $500M and valuations ranging from $500M to $1.5B. That latter category is arbitrary given the wild gyrations on Wall Street, but is a good place to start examining what’s happened to the software middle class. But first, we have to look at where it was…
Sherman, set the Wayback Machine to 1998
If we go back a decade or so, the ERP market was led by SAP and Oracle, followed by Baan, Great Plains, Intentia, JD Edwards, Lawson, MAPICS, QAD, SSA, and a host of others.
At the same time, there was a brisk best-of-breed market. PeopleSoft rode the human resources market (now renamed human capital management). Siebel capitalized on sales force automation and played a pivotal role in the expanded customer relationship management space. On the supply chain planning front, i2 Technologies and Manugistics competed for the lead, with Red Pepper determined to overtake both, while Manhattan Associates challenged a host of contenders in warehouse and transportation management.
On the product lifecycle management front, Agile Software and MatrixOne were newbies, and Dassault, PTC, and UGS were looking to move to product data management and PLM from their CAD roots. Speaking of Agile, remember when Ariba announced its plans to acquire Agile? At the time, Ariba was battling Commerce One, FreeMarkets, PurchasePro, and a host of others for the top spot in sourcing and procurement.
At the same time, Business Objects, Cognos, Hyperion, SAS, and others battled to create a market broader than their niches. Now, the first three are part of SAP, IBM, and Oracle, respectively, while privately-held SAS remains independent.
Sherman, take us back to 2008…after the elections, please
As we traveled back, were you surprised by the number of companies that have been acquired? I don’t think it’s over yet.
Look at the software middle class. Ariba is the lone large publicly traded company in sourcing, procurement, and spend management. I’ve already written about its attractiveness as a takeover target.
Once JDA completes the i2 deal, the supply chain market will consist of three middle class vendors: Manhattan, JDA, and privately-held Red Prairie. Does Oracle buy one and SAP purchases a second, a la the business intelligence and performance management market?
Who’s next in CRM? salesforce.com may be too large to buy unless Cisco, EMC, or IBM wants to make a bold bet on CRM-in-the-cloud. I don’t see it. Chordiant or RightNow (or both) may be more likely pick ups.
What about HCM? The middle class includes private-equity-owned Kronos and publicly traded SuccessFactors and Taleo as well as others. Again, does Oracle buy one and SAP another? The HCM space may be attractive to Cisco, too, as part of its plans to build out a collaboration suite that started with the WebEx buy.
What about the remaining ERP vendors? Intuit and Infor may be too big to buy, but if you look at the high cost of customer acquisition, do Oracle and SAP buy Deltek, Lawson, QAD, or any of the others for their customer bases and recurring maintenance revenue streams?
Will we move from five tiers to three or two?
If you look at today’s vendors in terms of market valuations, there are five tiers. At the upper crust are Cisco, EMC, Google, HP, IBM, Microsoft, Oracle, SAP, and others. Until the meltdown, all had market valuations north of $50B.
Well below this is a small, upper middle class of application vendors, which are limited to Dassault, Intuit, PTC, salesforce.com, and others with market caps in the $1B to $10B range. One could argue that it could include divisions of larger companies, such as AT&T’s Sterling Commerce and Siemens’ UGS, which could be active acquirers, too. Until the last seven trading days, Ariba could have been considered in this class, too. Are they predators or prey?
Slightly below this are the application vendors with valuations between $100M and $1B. These include many of the best-of-breed vendors and midsize ERP companies we’ve already discussed.
Then there is the fourth tier, consisting of dozens of companies with annual revenue in the $35M to $100M range. With a couple of exceptions, most are private, venture-backed firms, and many are struggling with elongated sales cycles, shrinking license fees, and nervous investors laser-focused on liquidity. They don’t enjoy the same recurring maintenance streams as the large vendors to help sustain product development or sales and market expansion.
At the bottom of the food chain are the smaller vendors. They may find themselves in the perpetual funding chase. You may have seen Sarah Lacy’s references to Jason Calacanis’s “Startup Depression” in her blog and in her Valley Girl column on BusinessWeek’s site. Mr. Calacanis posits that half to three-fifths of venture-backed firms will cease operations or be reduced to a skeletal crew within the next year and a half.
Real question: Where will future innovation come from?
I’m sure you can see where I’m going. My bet is that the rich will eventually buy most of the middle class, mortally wounding the viability of best of breed.
This puts more pressure on vendors in the fourth tier. Can they offer a unique enough product or service that can get them in front of potential buyers? Or, should the smart ones be positioning themselves to be bought, too? I suspect that many are thinking about the latter.
So, if the vendor universe gets sharply reduced, where will innovation come from in the future? Not from the giants that usually have to buy their way in.
The good news is that there are a lot of interesting software companies out there. Whether they can remain independent or viable is another story.
To help introduce you to some of them, we will be starting a new series, “Software Innovators from A to Z.” Look for our analysis of two new startups, Amitive and Zuora, as well as continuing coverage of vendors ranging from Accruent and Aegis to Zyme.
New at the Blog: How low can the stock market go?
We’re following the stock market sink closely at the First Thing Monday blog. Be sure to check back frequently for our updates and speculations on how low the stock slide can go.
What do you think?
Will it come down to two tiers? If so, will this slow or kill innovation? Will VCs abandon the enterprise market once and for all? What does this mean for buyers? Where is the bottom of the stock market slide? I welcome your feedback and ideas, leave a comment on our blog. As always, brichardson@amrresearch.com.
--------------------------------------------------------------------------------
© Copyright by AMR Research, Inc.
Sherman, set the Wayback Machine to 1998
If we go back a decade or so, the ERP market was led by SAP and Oracle, followed by Baan, Great Plains, Intentia, JD Edwards, Lawson, MAPICS, QAD, SSA, and a host of others.
At the same time, there was a brisk best-of-breed market. PeopleSoft rode the human resources market (now renamed human capital management). Siebel capitalized on sales force automation and played a pivotal role in the expanded customer relationship management space. On the supply chain planning front, i2 Technologies and Manugistics competed for the lead, with Red Pepper determined to overtake both, while Manhattan Associates challenged a host of contenders in warehouse and transportation management.
On the product lifecycle management front, Agile Software and MatrixOne were newbies, and Dassault, PTC, and UGS were looking to move to product data management and PLM from their CAD roots. Speaking of Agile, remember when Ariba announced its plans to acquire Agile? At the time, Ariba was battling Commerce One, FreeMarkets, PurchasePro, and a host of others for the top spot in sourcing and procurement.
At the same time, Business Objects, Cognos, Hyperion, SAS, and others battled to create a market broader than their niches. Now, the first three are part of SAP, IBM, and Oracle, respectively, while privately-held SAS remains independent.
Sherman, take us back to 2008…after the elections, please
As we traveled back, were you surprised by the number of companies that have been acquired? I don’t think it’s over yet.
Look at the software middle class. Ariba is the lone large publicly traded company in sourcing, procurement, and spend management. I’ve already written about its attractiveness as a takeover target.
Once JDA completes the i2 deal, the supply chain market will consist of three middle class vendors: Manhattan, JDA, and privately-held Red Prairie. Does Oracle buy one and SAP purchases a second, a la the business intelligence and performance management market?
Who’s next in CRM? salesforce.com may be too large to buy unless Cisco, EMC, or IBM wants to make a bold bet on CRM-in-the-cloud. I don’t see it. Chordiant or RightNow (or both) may be more likely pick ups.
What about HCM? The middle class includes private-equity-owned Kronos and publicly traded SuccessFactors and Taleo as well as others. Again, does Oracle buy one and SAP another? The HCM space may be attractive to Cisco, too, as part of its plans to build out a collaboration suite that started with the WebEx buy.
What about the remaining ERP vendors? Intuit and Infor may be too big to buy, but if you look at the high cost of customer acquisition, do Oracle and SAP buy Deltek, Lawson, QAD, or any of the others for their customer bases and recurring maintenance revenue streams?
Will we move from five tiers to three or two?
If you look at today’s vendors in terms of market valuations, there are five tiers. At the upper crust are Cisco, EMC, Google, HP, IBM, Microsoft, Oracle, SAP, and others. Until the meltdown, all had market valuations north of $50B.
Well below this is a small, upper middle class of application vendors, which are limited to Dassault, Intuit, PTC, salesforce.com, and others with market caps in the $1B to $10B range. One could argue that it could include divisions of larger companies, such as AT&T’s Sterling Commerce and Siemens’ UGS, which could be active acquirers, too. Until the last seven trading days, Ariba could have been considered in this class, too. Are they predators or prey?
Slightly below this are the application vendors with valuations between $100M and $1B. These include many of the best-of-breed vendors and midsize ERP companies we’ve already discussed.
Then there is the fourth tier, consisting of dozens of companies with annual revenue in the $35M to $100M range. With a couple of exceptions, most are private, venture-backed firms, and many are struggling with elongated sales cycles, shrinking license fees, and nervous investors laser-focused on liquidity. They don’t enjoy the same recurring maintenance streams as the large vendors to help sustain product development or sales and market expansion.
At the bottom of the food chain are the smaller vendors. They may find themselves in the perpetual funding chase. You may have seen Sarah Lacy’s references to Jason Calacanis’s “Startup Depression” in her blog and in her Valley Girl column on BusinessWeek’s site. Mr. Calacanis posits that half to three-fifths of venture-backed firms will cease operations or be reduced to a skeletal crew within the next year and a half.
Real question: Where will future innovation come from?
I’m sure you can see where I’m going. My bet is that the rich will eventually buy most of the middle class, mortally wounding the viability of best of breed.
This puts more pressure on vendors in the fourth tier. Can they offer a unique enough product or service that can get them in front of potential buyers? Or, should the smart ones be positioning themselves to be bought, too? I suspect that many are thinking about the latter.
So, if the vendor universe gets sharply reduced, where will innovation come from in the future? Not from the giants that usually have to buy their way in.
The good news is that there are a lot of interesting software companies out there. Whether they can remain independent or viable is another story.
To help introduce you to some of them, we will be starting a new series, “Software Innovators from A to Z.” Look for our analysis of two new startups, Amitive and Zuora, as well as continuing coverage of vendors ranging from Accruent and Aegis to Zyme.
New at the Blog: How low can the stock market go?
We’re following the stock market sink closely at the First Thing Monday blog. Be sure to check back frequently for our updates and speculations on how low the stock slide can go.
What do you think?
Will it come down to two tiers? If so, will this slow or kill innovation? Will VCs abandon the enterprise market once and for all? What does this mean for buyers? Where is the bottom of the stock market slide? I welcome your feedback and ideas, leave a comment on our blog. As always, brichardson@amrresearch.com.
--------------------------------------------------------------------------------
© Copyright by AMR Research, Inc.
Wednesday, September 10, 2008
One on One With the CEOs of Business Objects and Epicor | AMR Research
One on One With the CEOs of Business Objects and Epicor | AMR Research
One on One With the CEOs of Business Objects and Epicor
by Bruce Richardson
I recently spent a few days traversing the Golden State of California. While there, I met with the CEOs of Business Objects, E2open, Epicor, and Intellicorp as well as executives from four other interesting software and technology firms. Because of time and space limitations, our analysis will be distributed over the next few weeks.
During the meeting with Business Objects’ John Schwarz, my first question was: “What’s it like to be part of SAP?” My last question was a request for a sneak preview of his product plans for the next 12 months. You can read his answers and get all of our analysis at the First Thing Monday blog: Life With SAP: My Conversation With Business Object’s John Schwarz.
As for Epicor, this was my first meeting with Tom Kelly. He was named president and CEO of this midsize ERP vendor last February. Our meeting focused primarily on the impending release of Epicor 9. In my view, his company has done what Microsoft and Oracle once dreamed of: melding the best of their multiple offerings into a single, brand-new code base. For a closer look, we have the full story on our blog: Epicor 9: The Accomplishment That Eluded Microsoft and Oracle.
One on One With the CEOs of Business Objects and Epicor
by Bruce Richardson
I recently spent a few days traversing the Golden State of California. While there, I met with the CEOs of Business Objects, E2open, Epicor, and Intellicorp as well as executives from four other interesting software and technology firms. Because of time and space limitations, our analysis will be distributed over the next few weeks.
During the meeting with Business Objects’ John Schwarz, my first question was: “What’s it like to be part of SAP?” My last question was a request for a sneak preview of his product plans for the next 12 months. You can read his answers and get all of our analysis at the First Thing Monday blog: Life With SAP: My Conversation With Business Object’s John Schwarz.
As for Epicor, this was my first meeting with Tom Kelly. He was named president and CEO of this midsize ERP vendor last February. Our meeting focused primarily on the impending release of Epicor 9. In my view, his company has done what Microsoft and Oracle once dreamed of: melding the best of their multiple offerings into a single, brand-new code base. For a closer look, we have the full story on our blog: Epicor 9: The Accomplishment That Eluded Microsoft and Oracle.
Saturday, August 02, 2008
SAP Enterprise Support Contracts: Counting the Real Costs | AMR Research
SAP Enterprise Support Contracts: Counting the Real Costs | AMR Research
SAP Enterprise Support Contracts: Counting the Real Costs
Saturday, August 02, 2008
Derek Prior, Jim Shepherd
To a chorus of disapproval, SAP unveiled on July 16 that all existing customers will have to pay more for their maintenance and support contracts. But what impact will SAP Enterprise Support really have on loyal SAP customers?
SAP Enterprise Support Contracts: Counting the Real Costs
Saturday, August 02, 2008
Derek Prior, Jim Shepherd
To a chorus of disapproval, SAP unveiled on July 16 that all existing customers will have to pay more for their maintenance and support contracts. But what impact will SAP Enterprise Support really have on loyal SAP customers?
Thursday, May 01, 2008
FT.com / Companies / IT - SAP delays software rollout
FT.com / Companies / IT - SAP delays software rollout
SAP delays software rollout
By Maija Palmer
Published: April 30 2008 10:08 | Last updated: April 30 2008 18:22
SAP on Wednesday delayed the roll-out of its new online software for medium-sized businesses – a crucial part of its growth plans – and reported a steep fall in first-quarter profits.
The German group had hoped to generate €1bn from supplying its internet-based Business ByDesign software to 10,000 small to medium-sized customers by 2010. However, it said that it would take 12-18 months longer than expected to reach this target.
Business ByDesign is the company’s first foray into web-hosted software for the mid-market. Companies such as SAP and IBM are trying to cater for smaller customers as orders from big enterprises slow. The small business IT market is estimated to be worth about $400bn, but potential suppliers face stiff competition from entrenched competitors such as Microsoft.
Henning Kagermann, chief executive, said SAP was slowing down the roll-out as it looked for ways to reduce the cost of running the internet services. “We need to automate the running of the services, otherwise the cost base will be too high and the profit will not be good enough,” he said.
Mr Kagermann has promised that margins from the internet business will be the same as those of SAP’s other businesses. “I want to prove to the market that this way of selling software will not lead to a margin decline.”
While the company looks for ways to cut running costs, it will limit roll-out of Business ByDesign to just six countries and fewer than 1,000 customers.
SAP missed analysts’ estimates for its results for the three months to the end of March, reporting a 15 per cent increase in software and services revenues to €1.74bn, against expectations of around €1.8bn.
The weak results echo a disappointing performance by US rival Oracle last month, and compound fears that the software market may be slowing in the uncertain economic climate.
Mr Kagermann said the US remained a tough market, with customers spending less on software deals. He saw no signs of a slowdown spreading to Europe.
US sales, which account for a quarter of revenues, fell by 1 per cent, while European sales, which account for half of SAP’s business, rose 22 per cent.
Total revenues were €2.46bn ($3.8bn), up 14 per cent from a year ago. But net income fell 22 per cent to €242m, as SAP was hit by €130m in charges related to its acquisition of Business Objects last year, and a €40m investment in the Business ByDesign service.
Earnings per share fell 19 per cent to €0.21.
SAP reiterated forecasts that software and services revenues would grow 24 to 27 per cent at constant currencies this year, and said operating margins, excluding costs related to Business Objects, would be higher than expected because it was cutting back investment in Business ByDesign.
Copyright The Financial Times Limited 2008
SAP delays software rollout
By Maija Palmer
Published: April 30 2008 10:08 | Last updated: April 30 2008 18:22
SAP on Wednesday delayed the roll-out of its new online software for medium-sized businesses – a crucial part of its growth plans – and reported a steep fall in first-quarter profits.
The German group had hoped to generate €1bn from supplying its internet-based Business ByDesign software to 10,000 small to medium-sized customers by 2010. However, it said that it would take 12-18 months longer than expected to reach this target.
Business ByDesign is the company’s first foray into web-hosted software for the mid-market. Companies such as SAP and IBM are trying to cater for smaller customers as orders from big enterprises slow. The small business IT market is estimated to be worth about $400bn, but potential suppliers face stiff competition from entrenched competitors such as Microsoft.
Henning Kagermann, chief executive, said SAP was slowing down the roll-out as it looked for ways to reduce the cost of running the internet services. “We need to automate the running of the services, otherwise the cost base will be too high and the profit will not be good enough,” he said.
Mr Kagermann has promised that margins from the internet business will be the same as those of SAP’s other businesses. “I want to prove to the market that this way of selling software will not lead to a margin decline.”
While the company looks for ways to cut running costs, it will limit roll-out of Business ByDesign to just six countries and fewer than 1,000 customers.
SAP missed analysts’ estimates for its results for the three months to the end of March, reporting a 15 per cent increase in software and services revenues to €1.74bn, against expectations of around €1.8bn.
The weak results echo a disappointing performance by US rival Oracle last month, and compound fears that the software market may be slowing in the uncertain economic climate.
Mr Kagermann said the US remained a tough market, with customers spending less on software deals. He saw no signs of a slowdown spreading to Europe.
US sales, which account for a quarter of revenues, fell by 1 per cent, while European sales, which account for half of SAP’s business, rose 22 per cent.
Total revenues were €2.46bn ($3.8bn), up 14 per cent from a year ago. But net income fell 22 per cent to €242m, as SAP was hit by €130m in charges related to its acquisition of Business Objects last year, and a €40m investment in the Business ByDesign service.
Earnings per share fell 19 per cent to €0.21.
SAP reiterated forecasts that software and services revenues would grow 24 to 27 per cent at constant currencies this year, and said operating margins, excluding costs related to Business Objects, would be higher than expected because it was cutting back investment in Business ByDesign.
Copyright The Financial Times Limited 2008
Friday, April 18, 2008
SAP Sets Virtualization Coalition - Data Center Central
SAP Sets Virtualization Coalition - Data Center Central
Major software and hardware vendors are starting to work together, hoping to overcome some of the disconnects that arise between the two worlds during times of rapid technological change.
SAP has begun taking steps to forge a coalition to smooth out some of the rough edges of virtualization. The company has gathered the likes of AMD, Intel, HP, Sun, EMC, Cisco, Citrix, VMware and NetApp, as well as Linux providers Novel and Red Hat, to enhance process-driven virtualization platforms for business users.
The group is part of the Enterprise Services Community, a worldwide organization designed to help vendors and users overcome issues surrounding the development and deployment of business productivity software.
One key goal of the group is to help business-process professionals design their own processes to run in virtualized environments using standard modeling techniques regardless of their knowledge of virtualized environments.
Major software and hardware vendors are starting to work together, hoping to overcome some of the disconnects that arise between the two worlds during times of rapid technological change.
SAP has begun taking steps to forge a coalition to smooth out some of the rough edges of virtualization. The company has gathered the likes of AMD, Intel, HP, Sun, EMC, Cisco, Citrix, VMware and NetApp, as well as Linux providers Novel and Red Hat, to enhance process-driven virtualization platforms for business users.
The group is part of the Enterprise Services Community, a worldwide organization designed to help vendors and users overcome issues surrounding the development and deployment of business productivity software.
One key goal of the group is to help business-process professionals design their own processes to run in virtualized environments using standard modeling techniques regardless of their knowledge of virtualized environments.
Friday, April 04, 2008
New Leadership for SAP Reinforces Strategy Shift
New Leadership for SAP Reinforces Strategy Shift
The appointment of Leo Apotheker to co-CEO marks the leadership transition of the world's largest application vendor. This, plus other board changes, will accelerate SAP's shift to a parallel, multiproduct strategy.
The appointment of Leo Apotheker to co-CEO marks the leadership transition of the world's largest application vendor. This, plus other board changes, will accelerate SAP's shift to a parallel, multiproduct strategy.
Wednesday, March 19, 2008
What’s new: SAP woos mid-sized enterprises
What’s new: SAP woos mid-sized enterprises
By Geoff Nairn
Published: March 19 2008 00:28 | Last updated: March 19 2008 00:28
SAP hopes to woo mid-sized businesses with a range of pre-configured solutions that combine Intel-based hardware with a range of software.
The software includes Novell’s Suse Linux Enterprise operating system, SAP’s MaxDB database and its Business All-in-One enterprise suite.
The aim is to drive down the total cost of ownership of SAP software, which has traditionally had a pricey reputation among SMEs.
By Geoff Nairn
Published: March 19 2008 00:28 | Last updated: March 19 2008 00:28
SAP hopes to woo mid-sized businesses with a range of pre-configured solutions that combine Intel-based hardware with a range of software.
The software includes Novell’s Suse Linux Enterprise operating system, SAP’s MaxDB database and its Business All-in-One enterprise suite.
The aim is to drive down the total cost of ownership of SAP software, which has traditionally had a pricey reputation among SMEs.
Tuesday, March 18, 2008
SAP's Enhanced GRC Offerings Expand Integration Options
SAP's Enhanced GRC Offerings Expand Integration Options
SAP's governance, risk and compliance offerings align to financial, supply chain, and environmental safety and health functions. New releases of these offerings enhance integration but an overarching GRC platform awaits.
SAP's governance, risk and compliance offerings align to financial, supply chain, and environmental safety and health functions. New releases of these offerings enhance integration but an overarching GRC platform awaits.
Friday, March 14, 2008
SAP Insights: The View From the Castle | AMR Research
SAP Insights: The View From the Castle | AMR Research
We caught up with SAP’s Holger Fritzinger at the Dromoland Castle in County Clare, Ireland, where he had just finished hosting a two-day meeting with high-tech executives. This was the spring meeting of the company’s twice-yearly high-tech advisory council, one of the first vertical customer groups established by SAP.
The 12-year SAP veteran was recently named vice president of the company’s lucrative high-tech business unit. His domain includes thousands of customers across the whole ecosystem, from original equipment manufacturers to semiconductor firms, contract manufacturers, original design manufacturers, and software companies. While not part of his official business unit, the ecosystem also extends out to media (many consumer electronics companies now market or sell music, games, television programs, movies, and other content) and professional services firms (most of the large integrators run SAP) as well as retail since consumer electronics firms have added their own stores.
While SAP no longer breaks out revenue by specific verticals, high tech has long been one of the top performing sectors. This has been true since the very early days of R/3. In the past 15 years, SAP has generated billions of dollars in software and services from tech customers.
But so did many other smaller vendors. i2 Technologies amassed a very impressive base in supply chain management (SCM). PeopleSoft did the same in human resource management. Siebel had a very strong tech presence in CRM, as did Agile Software in product collaboration and product lifecycle management (PLM). Ironically, three of those four are now part of the Oracle product portfolio, purchased in part because of their presence in SAP accounts. As these applications mature, however, large customers are looking to bring the functionality back within the SAP Business Suite.
We caught up with SAP’s Holger Fritzinger at the Dromoland Castle in County Clare, Ireland, where he had just finished hosting a two-day meeting with high-tech executives. This was the spring meeting of the company’s twice-yearly high-tech advisory council, one of the first vertical customer groups established by SAP.
The 12-year SAP veteran was recently named vice president of the company’s lucrative high-tech business unit. His domain includes thousands of customers across the whole ecosystem, from original equipment manufacturers to semiconductor firms, contract manufacturers, original design manufacturers, and software companies. While not part of his official business unit, the ecosystem also extends out to media (many consumer electronics companies now market or sell music, games, television programs, movies, and other content) and professional services firms (most of the large integrators run SAP) as well as retail since consumer electronics firms have added their own stores.
While SAP no longer breaks out revenue by specific verticals, high tech has long been one of the top performing sectors. This has been true since the very early days of R/3. In the past 15 years, SAP has generated billions of dollars in software and services from tech customers.
But so did many other smaller vendors. i2 Technologies amassed a very impressive base in supply chain management (SCM). PeopleSoft did the same in human resource management. Siebel had a very strong tech presence in CRM, as did Agile Software in product collaboration and product lifecycle management (PLM). Ironically, three of those four are now part of the Oracle product portfolio, purchased in part because of their presence in SAP accounts. As these applications mature, however, large customers are looking to bring the functionality back within the SAP Business Suite.
Thursday, January 31, 2008
FT.com / Companies / IT - SAP confident of software sales
FT.com / Companies / IT - SAP confident of software sales
SAP confident of software sales
By Gerrit Wiesmann in Frankfurt
Published: January 31 2008 02:13 | Last updated: January 31 2008 02:13
SAP, the German business software manufacturer, expects that it, and many rivals, will avoid any serious fallout from the economic slowdown rippling in the wake of months of global financial turmoil.
Investors have grown increasingly worried that economic woes will lead companies to cut spending on software and computers, much as they did in 2002 when technology stocks went into tailspin.
However, Henning Kagermann, SAP chief executive, said his company had canvassed clients and concluded that demand for software that manages inventories and client data would remain strong.
“Software like ours is always in demand – in a boom because companies want to sell more, and in difficult phases because they’re looking to improve productivity,” he told the Financial Times.
It would be “absurd” to compare the current situation with that of 2002, when companies were forced to cut “exaggerated IT spending”, fed by the technology boom, at a speed that hurt software houses.
“The companies learned their lessons and became more careful with [information technology] spending,” said Mr Kagermann. “So I don’t think they’ll be forced to hit the brakes a second time.”
SAP said its operating margin would edge higher to 27.5-28 per cent this year, from 27.3 per cent in 2007, after being adjusted for writedowns and charges that accrued in the course of a big acquisition.
The company also said sales of its software and related services would grow by 12-14 per cent this year, when adjusted for currency moves, the same target set last year – which it beat by three points.
The projected slowing of growth comes as SAP integrates Business Objects, a software house it bought for €4.8bn ($7.1bn) last year, and introduces a new web-based product for small companies to market.
The projects are meant to reduce SAP’s dependency on selling software to the world’s largest corporations.
Mr Kagermann said that he would make a decision in spring or summer about whether he would extend his contract beyond early 2009.
Copyright The Financial Times Limited 2008
SAP confident of software sales
By Gerrit Wiesmann in Frankfurt
Published: January 31 2008 02:13 | Last updated: January 31 2008 02:13
SAP, the German business software manufacturer, expects that it, and many rivals, will avoid any serious fallout from the economic slowdown rippling in the wake of months of global financial turmoil.
Investors have grown increasingly worried that economic woes will lead companies to cut spending on software and computers, much as they did in 2002 when technology stocks went into tailspin.
However, Henning Kagermann, SAP chief executive, said his company had canvassed clients and concluded that demand for software that manages inventories and client data would remain strong.
“Software like ours is always in demand – in a boom because companies want to sell more, and in difficult phases because they’re looking to improve productivity,” he told the Financial Times.
It would be “absurd” to compare the current situation with that of 2002, when companies were forced to cut “exaggerated IT spending”, fed by the technology boom, at a speed that hurt software houses.
“The companies learned their lessons and became more careful with [information technology] spending,” said Mr Kagermann. “So I don’t think they’ll be forced to hit the brakes a second time.”
SAP said its operating margin would edge higher to 27.5-28 per cent this year, from 27.3 per cent in 2007, after being adjusted for writedowns and charges that accrued in the course of a big acquisition.
The company also said sales of its software and related services would grow by 12-14 per cent this year, when adjusted for currency moves, the same target set last year – which it beat by three points.
The projected slowing of growth comes as SAP integrates Business Objects, a software house it bought for €4.8bn ($7.1bn) last year, and introduces a new web-based product for small companies to market.
The projects are meant to reduce SAP’s dependency on selling software to the world’s largest corporations.
Mr Kagermann said that he would make a decision in spring or summer about whether he would extend his contract beyond early 2009.
Copyright The Financial Times Limited 2008
Tuesday, January 15, 2008
FT.com / Companies / IT - Strong holiday sales lift SAP shares
FT.com / Companies / IT - Strong holiday sales lift SAP shares
Strong holiday sales lift SAP shares
By Gerrit Wiesmann in Frankfurt
Published: January 15 2008 01:19 | Last updated: January 15 2008 01:19
German business-software company SAP said preliminary results showed strong sales in the Christmas quarter, lifting full-year growth of a key performance indicator above a previous forecast.
The announcement cheered investors, who have worried the credit squeeze could damp economic growth and corporate spending on software that runs inventories or client data.
The Walldorf-based company said sales of software and related services rose 13 per cent to €2.48bn ($3.69bn) in the fourth quarter and would have risen 17 per cent had exchange rates stayed stable.
Full-year sales of software and services rose at the same rate to €7.44bn, beating a forecast by SAP executives that sales would grow 12-14 per cent, expressed in constant currencies.
The world’s largest business software manufacturer last year introduced web-based programmes to lure small companies as sales of conventional software to global corporations slowed.
In consequence, SAP has shifted to calibrating its performance through revenues from software and services, rather than software alone – although even this older measure was strong.
Software sales, long seen as an indicator of follow-on maintenance revenues, rose 14 per cent – or 18 per cent at constant currencies – to €1.4bn in October, November and December.
This figure, slightly above analysts’ forecasts, helped push SAP shares on Monday to €33.70, 2.7 per cent higher than Friday’s close – although still below a high of €41.76 seen in September.
The company in October took investors by surprise when it announced the takeover of Business Objects, a business analytics company, for €4.8bn, SAP’s first big acquisition.
The move rattled investors just as they were starting to regain confidence in the company after a January announcement that its web-based service for small companies would reduce profitability in 2007.
SAP said on Monday its operating margin would, as forecast a year ago, fall to 26.5 per cent from 27.3 in 2006, with the dollar’s slide against the euro lobbing 0.3 points off profitability.
The company plans to release detailed results and give a forecast for this year on 30 January.
This week, it will give more details about the integration of Business Objects.
Copyright The Financial Times Limited 2008
Strong holiday sales lift SAP shares
By Gerrit Wiesmann in Frankfurt
Published: January 15 2008 01:19 | Last updated: January 15 2008 01:19
German business-software company SAP said preliminary results showed strong sales in the Christmas quarter, lifting full-year growth of a key performance indicator above a previous forecast.
The announcement cheered investors, who have worried the credit squeeze could damp economic growth and corporate spending on software that runs inventories or client data.
The Walldorf-based company said sales of software and related services rose 13 per cent to €2.48bn ($3.69bn) in the fourth quarter and would have risen 17 per cent had exchange rates stayed stable.
Full-year sales of software and services rose at the same rate to €7.44bn, beating a forecast by SAP executives that sales would grow 12-14 per cent, expressed in constant currencies.
The world’s largest business software manufacturer last year introduced web-based programmes to lure small companies as sales of conventional software to global corporations slowed.
In consequence, SAP has shifted to calibrating its performance through revenues from software and services, rather than software alone – although even this older measure was strong.
Software sales, long seen as an indicator of follow-on maintenance revenues, rose 14 per cent – or 18 per cent at constant currencies – to €1.4bn in October, November and December.
This figure, slightly above analysts’ forecasts, helped push SAP shares on Monday to €33.70, 2.7 per cent higher than Friday’s close – although still below a high of €41.76 seen in September.
The company in October took investors by surprise when it announced the takeover of Business Objects, a business analytics company, for €4.8bn, SAP’s first big acquisition.
The move rattled investors just as they were starting to regain confidence in the company after a January announcement that its web-based service for small companies would reduce profitability in 2007.
SAP said on Monday its operating margin would, as forecast a year ago, fall to 26.5 per cent from 27.3 in 2006, with the dollar’s slide against the euro lobbing 0.3 points off profitability.
The company plans to release detailed results and give a forecast for this year on 30 January.
This week, it will give more details about the integration of Business Objects.
Copyright The Financial Times Limited 2008
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