SAP Sets Far-reaching Goals for ERP Service
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Analysts say that SAP is setting unrealistic sales goals for its long-anticipated hosted ERP system, which will be available next year.
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Giving employees, customers and vendors easy-to-use analytics tools that deliver complex reports in real time promises to reshape the business landscape. Learn how SAP deployments running on Dual-core Intel Xeon processor-based blade-server systems provide enterprise-grade business analytics that empower business users and free IT professionals from the chore of running analytics reports.
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Beating analysts&#39; expectations and citing strong performance worldwide, SAP released preliminary fourth-quarter financial results on Monday, showing revenue will be about &#8364;3.25 billion ($4.8 billion), a rise of 10 percent compared to the same period last year.Fourth-quarter software and software-related services revenue will be about &#8364;2.48 billion, an increase of about 13 percent year-over-year, according to SAP.Total revenue for 2007 is expected to grow roughly 9 percent to &#8364;10.26 billion. Full-year 2007 software and software-related service revenue is expected to be about &#8364;7.44 billion, a jump of around 13 percent over 2006.Analysts polled by Thomson First Call had predicted on average that total fourth-quarter revenue would come in at $4.7 billion.Exchange rates took a toll on SAP&#39;s results, for as the dollar weakens against the euro, SAP&#39;s U.S. sales are worth less. At constant currency rates, fourth-quarter software and software-related services revenue growth will be about 17 percent year-over-year and total revenue growth will be 13 percent compared to 2006, SAP said.SAP&#39;s results were driven by performance across all regions, but the company showed particular strength in the Asia-Pacific-Japan market, it said. Fourth-quarter software and software-related service revenue rose about 27 percent there to &#8364;.30 billion and is expected to stand at about &#8364;.96 billion for the year, a rise of about 19 percent.SAP estimated fourth-quarter software and software-related service revenue in the EMEA region will be about &#8364;1.40 billion, a jump of roughly 13 percent and &#8364;3.98 billion for the year, which is also about a 13 percent rise.Growth was slower in the Americas, where software and software-related service revenue rose 7 percent in the fourth quarter to &#8364;.78 billion and is expected to be roughly &#8364;2.5 billion for the year overall, a year-to-year increase of 9 percent, according to SAP.However, SAP expects its operating margin to fall slightly for 2007, to 26.5 percent, compared to 27.3 percent in 2006. It attributed the decline to investments made in its Business ByDesign ERP suite targeted at the mid-market.SAP plans to provide more details on its 2007 earnings on Jan. 30.
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Globalization and technical transitions have not always gone smoothly for SAP, a big German software company.
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TechWeb - Despite soaring interest in software-as-a-service, SAP&#39;s new product is aimed at companies with less than 500 employees.
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(InfoWorld) - As Oracle executives patted themselves on the back for their company's reporting another strong financial quarter, they also couldn't resist having a go at prime applications rival SAP. "Oracle had another very strong quarter," Safra Catz, co-president and chief financial officer at Oracle, said Tuesday during a conference call with analysts to discuss the vendor's fiscal 2007Â first-quarter results. "We had our strongest first-quarter license growth in more than five years by gaining market share," she added. Charles Phillips, co-president of Oracle, said the company had won 88 deals going head-to-head with SAP during the quarter, including customer wins with Electrolux, Lockheed Martin, and U.S. Steel. Some of the business is what he termed "winbacks" of business Oracle had previously lost to SAP, including a strategic win at Wal-Mart Stores. In recent months, the bitterÂ competitive back-and-forthÂ between Oracle and SAP has reached a crescendo. Oracle jumped on SAP's July announcement ofÂ lower than expected salesÂ and cited it as proof that the applications vendor's growth had stalled. SAP retorted that the results were a slight blip and not indicative of a major issue with its performance, which it believes remains strong. Larry Ellison, Oracle's chief executive officer, cites two factors that he believes are working in Oracle's favor over SAP: its Java-based middleware and its aggressive focus on getting industry-specific expertise and products through acquisitions. Ellison claimed that Oracle's Fusion middleware is "years ahead" of SAP's NetWeaver integration platform. "NetWeaver is still relatively new and still incomplete," he said. Oracle's so-called "hot pluggable" or component-based Fusion middleware strategy is paying off, Phillips said. Typically, the company sells one or two of its middleware components into a customer account with the hope that over time that customer will expand their use of Oracle's middleware. Turning to applications, Ellison criticized SAP's recent decision toÂ retain the current versionÂ of its enterprise resource planning (ERP) software, mySAP ERP 2005, through 2010 and provide new functionality through regularly issued optional enhancement packages. "SAP has delayed the next release of its applications until 2010," he said. "They'll be two full years behind our Fusion release." Oracle is working on a new suite of enterprise applications, known as Project Fusion, which is due out in 2008. By contrast, SAP executives have positioned the company's move to a more modular approach to product upgrades as being driven by customers' demands to pick and choose functionality. This quarter will be the last time Oracle provides separate database and middleware growth figures, Catz said. In the first quarter, database revenue grew 10 percent, while middleware rose 56 percent. In future, Oracle will adopt the practice of IBM and Microsoft and not break out those sales, she said. Looking to the second quarter, Catz expects Oracle's net income to grow by between 13 percent and 17 percent as revenue increases by 22 to 24 percent. She forecast earnings per share (EPS) of $0.22. Those predictions don't take into account any specific charges likely to occur in the quarter.ADVERTISEMENTMAKE SOA REAL WITH IBM WEBSPHERE PODCASTStreamline processes and maximize efficiency within a proven service oriented architecture. Take back control of your business processes with IBM WebSphere.
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Borland Software Corp. has laid-out a product roadmap and strategy to better align customers&#39; Application Lifecycle Management processes with their changing business needs, helping deliver what it called &quot;Enterprise Resource Planning&quot; for software.
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SAP AG on Wednesday unveiled a service that evaluates security settings across a customer&#39;s SAP enterprise system. SAP Security Optimization helps customers identify and fix vulnerabilities
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SAP plans to expand its focus on business intelligence (BI) software over the next year.
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(InfoWorld) - SAP continued to ramp up its on-demand CRM offering this week, announcing that it will now include service-level capabilities, the third key component of CRM solutions. In February SAP kicked off its software as a service business with a sales force automation solution. In May the company added marketing, and in its third update within the year it is now announcing SAP Service. Liz Herbert, a senior analyst at Forrester Research, said that the SAP CRM solution is now displaying the kind of depth SAP is known for. "SAP added a component for managing products that many on-demand CRM vendors don't have. You can use it as the product master or bring in the product master which is typically found in the ERP system," said Herbert. The new service component includes Service Ticket Management, Rule-based Service Ticket Distribution, and Service Level Monitoring. Also included is a rules-base service-level determination calculator that automates the routing of service tickets based on a customer's service level agreement, said Angela Bandlow, vice president at CRM Solutions Marketing. "It's a tiered service that tracks SLAs based on the customer and the required response time," said Bandlow. One of the key differentiators for the SAP offering, according to both Bandlow and Forrester's Herbert, is its ability to integrate easily with MySAP ERP systems on the back end. Using product information found in the ERP system, a sales person can pull up manufacturing availability and pricing information and deliver a quote in real time online. Bandlow said while this completes the three major components of SAP CRM OnDemand, quarterly updates can be expected with the next update due in December. To date, the solution, like almost all on-demand solutions, is not industry-specific. But Bandlow said the company is looking at that and will respond to customer demand.
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Germany's SAP, the world's largest maker of business-management software, reported Thursday a third-quarter rise in revenue and net income, boosted by strong sales in the Europe, Middle East and Africa (EMEA) region and continued growth in the U.S.
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SAP AG  unveiled a  long-awaited line of Web-delivered software on Wednesday that  will radically change the company's business model and may  shake up the Internet software arena.
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SAP, the world's leading maker of business software, is planning to grow by 15 percent or more in the United States this year after a disappointing year in 2006, the head of the group's US operations said in a newspaper interview.
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Thinks modular for NetWeaver There'll be no more big updates for SAP's ERP software until 2010, as SAP entices customers and developers to adopt new products and initiatives for its NetWeaver SOA strategy.â¦
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(InfoWorld) - SAPÂ is stepping into uncharted waters with the launch of itsÂ hosted business applications service, codenamed A1S,Â on Wednesday. The move will give it a head start over Microsoft and other rivals, but could also mean SAP learns the hard way that offering hosted ERP on a wide scale is difficult to do. Offering business applications on demand, also called software as a service (SaaS), is not new. But most services, including those from trailblazer Salesforce.com, have focused on customer relationship management or human resources management, only a part of ERP (enterprise resource planning). Those functions are easier to offer as a hosted service, since managing sales and payroll tends to be fairly standard across industries and countries. ERP as a whole is more complex, involving tasks like supply chain management, procurement and accounting, for which requirements and regulations can vary greatly. "It's less standard across industries, but even more importantly across geographies. The regulatory differences are profound even between the Netherlands, Belgium, and Luxembourg," said Bo Lykkegaard, a research manager with IDC in Denmark. Even the existingÂ leader in hosted ERP, NetSuite, has found it difficult to offer the services widely outside the U.S., according to Lykkegaard. "They've been selling mostly CRM internationally, which is easier to localize because it's mostly a question of currency and sales tax." "Hosted ERP is still nascent, and that's what A1S is largely about. That's what makes the A1S launch today so interesting," he said. SAP executives are giving the first public demonstration of A1S, aimed at midmarket companies with up to about 2,000 employees, in New York on Wednesday. They are also expected to unveil the name for the service and possibly pricing. The software is being tested by a handful of customers now and is likely to be rolled out gradually next year starting in the U.S. and parts of Europe. The complexity of hosting ERP software has prevented Microsoft from announcing plans to offer its Dynamics ERP applications as a service, although its hosted Live CRM software is being released this quarter. "Software as a service makes a lot of sense for CRM, because the offering typically goes in with very little customization -- a sales process is a sales process," Klaus Helge Andersen, corporate vice president for Microsoft Business Solutions, said in a recent interview. "ERP has more deep vertical content, and all the multitenant platforms I know about don't have a customization model that works well for individual customers." SAP is expected to show in New York Wednesday how it gets around this problem. It has touted the benefits of A1S at some length but hasn't shown publicly yet how it works. It has said it will be quick and easy for businesses to set up, with interfaces tailored for industries and users. And it promises to open a new market for ERP for smaller companies wary of its complexity, much as Salesforce.com opened doors for CRM. Lykkegaard has seen A1S and said it is built from the ground up as a hosted service, and that SAP has done much to make it easy to use. Customers can look at the software on the Web and try configuring it before they purchase it, "so what used to be a presales exercise the customer can do for themselves," he said. "Then when you configure a business process it's all model-based, so you choose a business process and the user interface will change correspondingly. It's procedure driven." "They truth will be in the details, and we'll see that when some of these midsize companies start to work with the software," he said. Besides NetSuite, SAP will face competition from many small companies offering hosted ERP in local markets. In addition, Deloitte & Touche has been offering hosted ERP using Microsoft's Dynamics software in some European countries, Lykkegaard said, although Deloitte declined a request to discuss it. The rewards are potentially big. IDC projects revenue from on-demand applications to increase almost 60 percent in 2007, and grow at a compound annual rate of 32 percent over the next five years. In 2006, hosted applications accounted for about 3 percent of all software applications revenue. That will increase to 10 percent by 2011, Lykkegaard said. "Keep in mind that's revenue from licenses and maintenance, not just new software licenses, so it's a very profound impact," he said.
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SAP AG is telling users that mySAP ERP 2005 will remain as the core of its software through 2010, with enhancements available in easier-to-install components -- a move aimed at wooing customers to install incremental upgrades.
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Company targets software-as-service businesses with Âon demandÂ database program.