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SAP chief foresees revival in 2010

3rd Feb 2010
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Having risen through SAP’s ranks to become co-CEO with Hasso Plattner in 2008, Leo Apotheker was took on sole executive responsibility in May last year, just as the recession was beginning to bite. Here, he explains how the financial crisis has shaped his thinking.

Having survived last year’s “exceptional” financial storm, Leo Apotheker is glad to see the back of 2009.  “I hope we don’t see another crisis like this for many years to come. I don’t even think we can survive another one, not just SAP, the world as such, but that’s a different story.”

The 2008-09 financial crisis significantly affected how people look at software and changed customers’ buying behaviours by delaying investment cycles, Apotheker explains.  These new imperatives provided a stiff challenge to SAP: “People want faster value, and they want to be able to quickly implement these solutions and extract the value out as fast as they can.”

The company responded with an expanded portfolio of products that helped it deliver a return on investment more quickly. “We embarked on a lean transformation of the company, which is still undergoing and still underway, and implemented very efficient cost-cutting measures in order to support the margin.”

Strong fourth quarter figures demonstrated that the efficiency drive was having an effect, and globally, the economic climate has improved ”a little bit”, he says.

“Customers were less reluctant to buy software. People understand that in this kind of an environment, sooner or later, we have to do the right thing and that is to invest in some software. That is the best lever that you have in order to start rowing again. We captured these opportunities with a vengeance.”

The finance sector was particularly successful for SAP, he adds: “We grew financial services by 37%, banking by 46%, and insurances by 24%. We are very proud to be able to announce that Deutsche Bank is going to run SAP for its core banking platform... We can see there is a real shift in the attitude of the financial institutions towards the type of software that SAP is capable of providing.”

With the rise of Cloud Computing to contend with, Apotheker explains that innovation is what drives SAP’s growth. “You can’t be a high tech company if you don't innovate. But innovation is much more than just having a cool great idea. Real innovation really means that you bring new ideas to the market on time in profits and actually brings value to the customer.”

Apotheker insists that SAP “gets” the Cloud and explains: “We don’t think the Cloud is just a mythological phenomenon. It is actually a real thing. But our answer regarding the Cloud is a little bit less hype and would like a little bit more hybrid, because at the end of the day our customers want to do hybrid. We believe in choice. We believe that customers should be able to choose between on-demand and on-premise, and we believe that we need to combine the best of these two worlds, and not segregate them. So we are going to give our customers choice and flexibility. They can choose between on-premise, on-demand, and a mix of both. We will enrich the Business Suite and SAP BusinessObjects with competitive on-demand extensions."

Against this backdrop, a lot rides on Business ByDesign offering, the company’s Cloud-based ERP suite for small and mid-size businesses. “Business ByDesign is volume-ready in 2010,” says Apotheker. “It will be the most complete on-demand suite in the industry, on the markets. It probably has an advance of a few years compared to any competitor. It is already in use by customers in six markets, Germany, the US, the UK, France, China, and India.

"We are bringing out new versions, which are significantly improved with additional functionality, fully multi-tenancy enabled. It has a rich new user interface. It will be available with real-time analytics, of course, with mobile support. It will enable partners or customers or both to extend it in easy fashion, so that we can have additional scale and reach. We are convinced that with ByDesign, we will change the markets and will actually create for SAP a whole new market."


Replies (2)

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By daveforbes
09th Feb 2010 09:56


However he did not forsee he would be out of his job by the end of the week !

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By CRebel
11th Feb 2010 18:42

How well researched?

Glaring mistake in first para. Leo was co-CEO with Henning Kagermann, not Hasso, problem is now how much do I believer of what else was written.!!

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