SAP lifts local revenue

Despite posting a loss of $US22million in the Japanese market for the first quarter of 2004, software giant SAP has recorded strong quarterly growth in Australia and New Zealand, with a combined increase of 10 percent in revenue compared to last year.

SAP's growth was attributed to a number of factors including a strong demand for mySAP and ERP applications in the mining, retail, public sector and services industries, as well as signing deals with food giant Franklins and Australian automotive goods retailer SuperCheap.

SAP's two major competitors, Oracle and PeopleSoft are currently involved in a hostile takeover bid, something SAP Australia and New Zealand managing director Geraldine McBride says only strengthens SAP's capabilities.

"We have seen growth balanced across the whole range of customers, from the top-end solutions to SME, and I think we are taking the market share away from our traditional competitors," she told Computerworld.

The first-quarter results for SAP showed a 23 percent increase in net income on software revenue, up 5 percent from last year.

The US has made a significant contribution to this increase with software revenue up 45 percent. It is expected to be the largest growth area for SAP in 2004.

During the last two years SAP has replaced the US management team, reorganised the sales force and made a concerted effort to target mid-sized enterprises in addition to big corporations. These corporations have traditionally been the primary focus for the software company.

Chairman and CEO of SAP, Henning Kagermann said SAP underperformed in the first three months of the year with revenue in Europe, the Middle East and Africa (EMEA) generally flat, slipping 4 percent. In Germany, SAP's home market, revenue was down 1 percent.

Massive steps will be taken to combat flagging market conditions in Japan where companies are placing smaller orders because of the economy. The realignment is proposed for completion by the end of the year.

- with John Blau

Oracle saga not over

At the end of a strong quarter six months ago, PeopleSoft CEO Craig Conway told analysts that Oracle's bid for his company was effectively dead and having no impact on sales. However, last week Conway revised his message and blamed Oracle's lingering takeover campaign for lost and delayed sales.

When Oracle finally backs off, "some amount of deals that have been held or deferred will be released", Conway said. "There will be a release of the dam." PeopleSoft's first-quarter revenue of $US643.1 million fell slightly short of analyst expectations, marking the first time the company has missed estimates since Oracle launched its takeover bid last June. Though analysts say Oracle has little chance of acquiring PeopleSoft, thanks in large part to an antitakeover provision in PeopleSoft's bylaws known as a "poison pill", Oracle has persisted in its $9.4 billion cash offer to PeopleSoft's shareholders for control of the company.

Chief financial officer Kevin Parker said PeopleSoft has spent $55 million to date fending off Oracle's advances and will spend another $10 million to $12 million next quarter. "We've gotten to the point where we've got to make choices between paying our lawyers and trying to run the business," he said.

- Stacy Cowley

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