SAP acquisition targets small, medium businesses

SAP AG has acquired a small Israeli company, allowing the Walldorf, Germany-based business-software maker to broaden its offering to the small and medium businesses (SMB) market.

SAP closed the deal to acquire TopManage Financial Solutions Ltd. on Tuesday, Léo Apotheker, the German company's president for Europe, the Middle East and Africa (EMEA), told journalists here Wednesday.

TopManage, founded in 1996 and based in Tel Aviv, provides software handling small-business functions such as general ledger, sales, purchasing, banking, inventory, and costing. Its Windows 95-based product has been sold in Israel for three years.

The new parent company is known for serving large enterprise customers, but has decided to go after SMBs by integrating TopManage's offerings into its MySAP.com platform.

"Larger firms represent about 50 percent of IT spending, but there is a big chunk we can address with our strategy today," Apotheker said.

SAP chief executive officer and co-chairman Henning Kagermann said he expects the SMB sector to account for about 15 percent of his company's sales within three or four years. But he insisted the acquisition does not mark a change in the company's original focus: integrated business applications.

"Everything we announce fits into the same category," he said. "The opportunities are so large in this space that we would be unwise to change our strategy."

Company officials would not say how much they paid for TopManage, a privately held company with some 70 employees. Nor would they say when or at what price the SMB product will be made available to SAP customers.

"We'll offer an adequate price. We are analyzing this deeply and hopefully within the next two weeks we'll announce the final price," said Hans-Juergen Uhink, SAP's vice president for small and medium business in EMEA.

SAP plans to expand its own distribution network to service SMBs, and also to recruit channel partners to sell the product. The former TopManage will remain responsible for distribution in its home market.

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