SAP CEO Details Prospects For 2010

Leo Apotheker is looking to the software firm's forthcoming Business ByDesign suite to boost revenue after a difficult 2009.
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SAP executives Wednesday underscored fourth-quarter glimmers of hope in what was otherwise acknowledged to be a very difficult 2009. The company also laid out expectations for 2010, including a 4% to 8% increase in revenue and plans to bring a revamped on-demand Business ByDesign suite to market by mid 2010.

Wednesday's announcements confirmed fourth quarter and full-year 2009 financial results containing more than a few concerning figures, including a 28% drop in software revenue and an 8% decline in total revenue. Blaming the global financial crisis and "the worst recession in decades," SAP CEO Leo Apotheker said changes in the market would have a lasting impact on the software company.

"Purchasing decisions are made much more cautiously and with some delay," Apotheker said. "The way software is implemented and used has also changed. Customers want to generate value from their investments faster, and they want to implement solutions faster than ever before."

In response, Apotheker vowed SAP products would be based on three principles: fast implementation, rapid time to value and easy, pervasive access to information at any time through any device.

Pointing to positive four-quarter trends, SAP executives noted revenue increase of 5% increase in the U.S. and 6% in the Asia Pacific region. Total software revenues still declined 14% on the quarter. But executives saw a break in the negative trend.

"We've noticed growing confidence and optimism, and [in the last quarter] some customers carried out investments that had been delayed," Apotheker said.

SAP specifically highlighted progress in the financial services market, with big deals with Deutsche Bank and Credit Agricole helping to drive a 37% increase in sector revenue.

Looking forward, Apotheker said Business ByDesign, was being revamped and would be relaunched midyear with a new GUI, real-time analytics capabilities (from BusinessObjects Explorer) and extensive mobile-device support. Beset by internal cost-of-operation issues last year, SAP Business ByDesign is a software-as-a-service based applications suite designed for small and midsize companies.

Countering "rumors in the press," Apotheker said SAP remains the leader in enterprise applications adding that it's "twice as large as number two," in an obvious reference to Oracle. He also noted competitive wins including 2009 software deals with Pfizer, 3M, British Gas and Hilti.

SAP ended its fiscal year on December 31 with total revenue of $14.7 billion. Apotheker's "twice as large" comparison clearly excludes everything but Oracle's revenue in the applications market, where it offers Oracle E-Business Suite, Oracle Peoplesoft, Oracle Siebel and Oracle JD Edwards software. Oracle's total revenue (including database revenue) for its fiscal year ended June 30, 2009 was $23.3 billion. That's not counting this week's blockbuster acquisition of Sun, which should push Oracle over $34 billion in revenue -- or more than twice the size of SAP.