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10/27/2004
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SAP, HP Jointly Target Small and Midsize Businesses

The hardware, software, and services package is designed to make enterprise-app implementations easier and more affordable.

SAP and Hewlett-Packard today introduced a combined hardware, software, and services package geared toward businesses that generate less than $1 billion in annual revenue. The scaled-down offering extends a four-year partnership that's been focused on larger organizations.

The package covers enterprise apps such as customer-relationship-management and ERP software and includes integration, maintenance, support, and training. At $325 per user, the two vendors say the offering is more affordable and gives small and midsize businesses an IT platform that can be scaled up as their companies grow. The offerings are customized for the consumer-goods, high-tech, and technical-services-provider industries; support for other industries will be added in the future. Available now in the United States, the offering could be rolled out to Europe and Asia in about six months.

Most customers spend up to 90% of their IT investment maintaining legacy systems, according to Bill McDermott, president and CEO of SAP America. "Mid-market, $3 million companies in [the United States] don't have huge IT departments because they can't afford them," McDermott says. In some cases, these companies are just now buying ERP systems, and "instead of having to buy everything separate, we took the complexity out of the equation and put the whole solution in a nice neat package."

SAP, which will manage the customer accounts, says the expertise it has gained in its 75,000 ERP installations in 125 countries takes the guesswork out and will help get customers up and running quickly. McDermott says it should take between two weeks and three months, depending on the complexity of the project.

The companies say the United States was the logical choice to first roll out the service. One-third of SAP's total sales comes from the United States, and about 30$ of that comes from small and midsize businesses. For HP's part, the new offering made sense, says Jack Novia, HP's senior VP and managing director in the Americas. Says Novia, "About 50% of all SAP installations run on HP platforms."

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