SAPs U.S. Sales Jump as Customers Move Over

Officials say customers are moving over from such companies as PeopleSoft and Siebel, giving its U.S. revenues a boost.

Responding to an increasingly hesitant U.S. customer base, SAP AG reported Thursday a 14 percent increase in its net income as customers moved over from such companies as PeopleSoft Inc. and Siebel Systems Inc., officials said.

PeopleSoft, of Pleasanton, Calif., is fighting the battle of its life, fending of a $7.7 billion hostile takeover bid from Oracle Corp. That bid is awaiting the outcome of an antitrust case waged by the U.S. Department of Justice. A decision is expected as early as August, or it could come much later.

San Mateo, Calif.-based Siebel posted quarterly results Wednesday that were down 10 percent from last year, with the companys lowest license sales total in several years.

Walldorf, Germany-based SAP, however, posted software revenues in the United States that increased a whopping 63 percent to $172 million, versus $105.5 million in U.S. sales last year.

"The Americas regions, specifically in the U.S., continued to be the growth driver for SAP in the second quarter," SAP said in a statement.

SAPs net income increased to $305 million for the quarter, from $269 million for the same quarter last year. Software revenues for the second quarter were reported at $610 million, compared with $529 million for the same year-ago quarter—an increase of 15 percent compared with 2003.

Total revenues increased 9 percent, from $2 billion a year ago to $2.21 billion this quarter.

For the first time, SAP broke out its earnings for the SMB (small and midsized business) sector during its second-quarter reporting. SAP began breaking out specific product segments—supply chain management and customer relationship management—about two years ago. It also breaks out earnings for supplier relationship management and product lifecycle management applications.

SAP said in the year to date it has gained 1,104 new Business One and 385 new All in One customers. Business One, which saw a 320 percent growth in new customers in the first half of this year compared with the same time period last year, is SAPs solution for small businesses, while All in One, which saw a 50 percent increase in new customers, is geared more toward middle-market enterprises.

During the second quarter, 28 percent of SAPs sales were attributed to the SMB sector, versus 21 percent of sales for the same quarter last year.


"SAP really views and is already in this market segment were calling SMB, and seeing quite a bit of growth," said Michael Park, senior vice president for midmarket and SMB solutions at SAP, in an earlier interview with eWEEK. "Were trying to provide more transparency and show how diverse our portfolio really is. [We also want to] reinforce that this isnt some go-with-the-market trend—we are really achieving results in SMB."

SAP also announced Thursday that it has hired a new senior vice president for its global SMB initiative. With 25 years experience under her belt, Donna Troy will be responsible for building and managing a global partner channel, as well as developing and executing a new go-to-market strategy, officials said. Troy will report to Leo Apotheker, executive board member and president of global field operations at SAP.

For future guidance, SAP let its previously stated full-year guidance stand, reiterating that it expects overall software revenues to rise 10 percent over last years revenues.


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