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10 December 2023

SAP sees no sign of global slowdown in '07 results

By Agencies


Germany's SAP, the world's largest maker of business planning software, said on Wednesday that 2007 results show broad-based regional growth and no signs yet of global economic weakness.

"(Growth) was broad-based across every major region, which means we are not on the edge of a global recession," SAP Deputy Chief Executive Leo Apotheker told a news conference in Silicon Valley held to discuss the closing of a recent acquisition.

SAP's software is used by many multinational companies to manage far-flung operations, and Apotheker said his comments were limited to the company's own $15 billion-a-year business and were not meant as a general global economic forecast.

SAP surprised the market on Monday by saying fourth-quarter revenue would be at the high end of expectations. Software and services revenue rose 13 percent to 2.48 billion euros. Sales in the Americas grew 7 percent, while EMEA sales rose 13 percent and Asia-Pacific revenue jumped 27 per cent.

IBM posted better-than-expected preliminary results the same day, suggesting technology companies serving corporate buyers remain insulated from broader U.S. economic weakness.

"You know that we had a very strong growth (in 2007)," Apotheker said, but added: "I can't predict 2008 yet."

Apotheker was speaking at a news conference to mark closure of SAP's 4.8 billion-euro acquisition of Business Objects. SAP executives said they would offer more commentary on their 2008 outlook once they publish full results on January 30.

He said SAP may benefit, relative to other tech companies, if tougher economic times are ahead, arguing that the Walldorf, Germany-based company's business management software remains relevant as businesses aim to curb costs of global operations.


SAP and Business Objects executives said they were prepared to start selling joint products from the merger this month.

The nine new software packages are designed to help companies gain better insight into their businesses, manage operations and comply with corporate governance policies. They will be sold both by SAP's and Business Objects' sales teams.

Apotheker said the aim of the rapid product introductions was to "hit the ground running" in the two companies merger.

The Business Objects acquisition opens up a new front in SAP's battle with arch-rival Oracle Corp.

Research firm IDC estimates the market for so-called business intelligence software, which helps extract financial insights from mountains of corporate data, is a $15 billion industry, growing at 9 percent to 12 percent a year, and Business Objects has a 17 per cent share.

"It makes SAP the instant leader," SAP Chief Executive Henning Kagermann told the same news conference.

SAP reiterated Business Objects is a rare exception to its long-standing reluctance to do major acquisitions. Kagermann emphasized it remained focus on internally generated expansion and growth among small and medium-sized business customers.

Oracle won a three-month-long campaign on Wednesday to buy BEA Systems Inc, which makes so-called middleware that helps business computer systems interact with one another, after Oracle raised its bid by 14 percent to $8.5 billion. 

Separately, Sun Microsystems Inc agreed to pay some $1 billion for MySQL, a maker of open-source database software that competes with Oracle.

SAP shares closed up 65 cents, or 1.3 per cent, on the New York Stock Exchange on Wednesday. The stock is off 3 percent so far this year, or far less than the 11.5 per cent decline in the Morgan Stanley Hi-Tech index, of which it is a part. (Reuters)