SAP LOWERS BAR TO BOOST REVENUE

Mergers, Acquisitions and Financial Results

German software company SAP signed up 200 new clients in SA last year and expects to duplicate that this year by focusing on small and medium-sized businesses.

The company aims to double its revenue and quadruple its customer base globally by 2010, with even higher targets in Africa and SA, says Claas Kuehnemann, its MD in Africa.

"That's a bold statement, but we see Africa as a growth market." SA was a maturing market, but it still presented better opportunities than in Europe where the economies were growing more slowly, he said.

SAP traditionally sells enterprise resource planning (ERP) software to large businesses, with individual projects often costing R100m. As that market becomes saturated it has scaled down its systems for smaller users, giving it a far larger market to tap. The gamble has paid off, with SAP globally winning 10 new customers every day.

SAP is now aiming at a market expected to be worth $70bn in 2010, compared to the traditional market for its software of $30bn.

SAP claims a 62% market share globally. Kuehnemann says that dominance means SAP is becoming the accepted standard for enterprise software.

Kuehnemann is a frequent critic of SAP's main rival, Oracle, which has grown through aggressive acquisitions but still lags in market share. Customers were voting with their wallets and supporting SAP's strategy of extending its software features in partnerships with other developers, rather than by acquiring them, he said. "Customers understand that our competitors who have been on the acquisition trail will now have to spend time and attention on themselves, integrating the different companies and technologies they've bought. By contrast, we can focus on our customers."

Business Day