Software Still King At SAP - InformationWeek

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Software // Enterprise Applications

Software Still King At SAP

Unlike many enterprise software vendors that get their biggest revenue lift from continuing maintenance, SAP's software sales' growth took the top spot in its second quarter ended June 30.

SAP's overall software revenue increased 15% to $609 million from a year earlier. Maintenance revenue grew 10% to $855 million. SAP saw slower revenue growth from its consulting business, which inched ahead a mere 2% to $597 million.

SAP's 2Q Results
  2004 2003 Change
Revenue $2.18B $2.0B 9%
Net income $305M $268M 14%
Basic earnings per share $0.98 $0.87 14%
Data: SAP
The healthy second-quarter earnings could be attributed to SAP's strong showing in North America, where the company boosted software revenue to $172 million, up nearly 26% from a year earlier. SAP's U.S. business will grow rapidly for the rest of 2004, but not as fast as in the first half of the year. "We cannot expect to have such a stellar growth again," CEO Henning Kagermann told CNBC.

In an earlier statement, Kagermann attributed the favorable results to SAP's ability to offer what companies want: reliability, innovation, financial strength, and broad product portfolios. "Our ability to deliver on all four of these qualities, along with the investments we have made in expanding our product offerings and technology," he said, "have all contributed to our continued share gains against our peer group."

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