SAP Continues to Shape Market Dynamics by Delivering Strong 2004 Asia Pacific Performance

January 31, 2005 by SAP News 0

SAP shaping the future of technology for businesses of all sizes with enhanced solutions delivered from new Asia Pacific market hubs

SingaporeSAP Asia Pacific, a subsidiary of SAP AG (NYSE: SAP), today announced it exceeded 2004 performance targets with total 2004 *Asia Pacific total revenue of €480 million. This represents 20 percent year-on-year growth [24 percent at constant currency]. Software revenue for Asia Pacific grew 28 percent [33 percent at constant currency] to €175 million during the same period. The company’s Asia Pacific operations ended 2004 strongly with Q4 total revenues of €146 million, up 26 percent over the same quarter in 2003 [28 percent constant currency]. SAP’s worldwide total revenues reached €7.5 billion in 2004 with software revenues of €2.4 billion. Increased adoption of SAP NetWeaver™ and the mySAP™ Business Suite, including mySAP CRM and mySAP ERP, drove this industry-leading growth. The signing of more than 1,000 new Asia Pacific customers in 2004 was complemented by both increased customer satisfaction and customer retention and supported by the hiring of more than 1,140 new employees in the region. SAP extended its marketshare against its peer group based on software revenue by six percentage point gain in 2004 over 2003 to 67%.

“Our success in 2004 is evidence of how we have increasingly become a trusted partner for Asia Pacific businesses looking for better ways to quickly adapt their business models and drive internal efficiencies,” said Hans-Peter Klaey, President and CEO, SAP Asia Pacific. “Organizations look to IT as a way to boost competitive advantage and SAP will continue to be their business partner of choice. Building on the success of 2004, SAP Asia Pacific looks to accelerated profitable growth, increased CRM and overall application market share and business application platform leadership in 2005.”

Substantial Regional Investment Leading to Growth

Asia Pacific is one of the fastest growing region for SAP with strong growth from Australia, New Zealand, Korea and Philippines and some of the most accelerated growth from China and India markets. This growth was buttressed by SAP’s significant commitment to the region, investing tens of millions euros in Asia Pacific as part of major initiatives across several markets, and hiring and training hundreds of new employees. Last year, SAP announced several key developments across the region:

  • SAP expanded its research and development operations in Asia Pacific in
    2004 with both SAP Labs India and SAP Labs China undergoing significant expansion.
    The Labs will bring SAP’s software development even closer to its Asia
    Pacific customers’ markets.
  • The launch of its latest Global Support Center (GSC) in Dalian, China,
    expanded the reach of SAP’s worldwide support network. The GSC China
    is the primary hub for providing services to SAP customers in Asia Pacific
    countries including China, Japan and Korea. (September 2004)
  • SAP partnered with the Shanghai government and the Shanghai Jiaotong University
    to establish the Shanghai RFID Demo Center. The center will help promote the
    wider usage of RFID in China. (December 2004)

SAP NetWeaver – The Platform of Choice
With SAP NetWeaver, companies can execute new business strategies and processes rapidly while maintaining a sustainable cost structure. SAP NetWeaver supports open industry standards and interoperability, allowing for ease of integration with both SAP and non-SAP systems and enabling the Enterprise Service Architecture, SAP’s blueprint for a services-oriented architecture. SAP is leading the way with its Business Process Platform by enriching the SAP NetWeaver composition platform with ready-to-run business processes which are accessible through Enterprise Services.

Last year, through SAP NetWeaver, companies including Dewan Sabah Kota Kinabalu, Bursa Malaysia, Asiatic Development Bhd (Malaysia); STATSChipac (Singapore); Bank Mandiri (Indonesia); and General Insurance Corporation (India) enjoyed improved business performance.

“The Business Process Platform provides speed to market, efficiency and scalability for SAP and gives our customers a platform that supports business flexibility, agility and a competitive advantage in a demand driven environment where customers can more easily align business processes with their business needs. We believe we own a substantial lead against our peers in time to market and customer and partner support in the development of our Business Process Platform. We expect that the Business Process Platform will help attract independent software providers and partners to extend SAP solutions into new markets, acquiring new users and thereby generating excellent opportunities for growth for SAP. 2005 will be a year of investment for SAP, which will help drive growth and efficiency for our company,” said Hans-Peter Klaey.

To share the power of SAP NetWeaver interoperability with potential customers, SAP announced the launch of the Safe Passage Program earlier this month. The program will allow companies that use PeopleSoft and J.D. Edwards solutions to quickly and seamlessly extend their IT infrastructure with the SAP NetWeaver platform. These organizations will benefit from an integration of their entire IT landscape with one open platform that enables flexible business processes across the entire organization.

Dominance in the Mid-Market Space
SAP’s strong performance in 2004 was driven by small and medium-sized business market success as SAP continued to leverage its volume business model. Australia, China, Korea and India experienced unprecedented growth in their respective SMB and mid-market focused businesses.

In 2004, SAP Asia Pacific signed nearly 200 new mySAP™ All-in-One customers and more than 400 SAP® Business One customers, bringing the total number of SMB customers in Asia Pacific to nearly 1,000. To support this growing customer base, SAP has established an SMB business unit with more than 200 employees in Asia Pacific including a development center in China.

SAP’s growth has also been boosted by the success of SAP Best Practices, a platform for SAP and its partners to package competitively priced industry-specific solutions for new and existing mid-market customers. The SAP Best Practices solutions allow customers to implement industry-tailored best practice solutions quickly in as few as five weeks.

“The Asia Pacific economy is dominated by midsized businesses and IT spending within the mid-market is expected to grow considerably faster than the enterprise segment. This presents a tremendous opportunity for SAP as these businesses can benefit from the application of the mid-market SAP Best Practices we’ve honed to drive industry leadership for our customers,” said Robert Vetter, SAP Asia Pacific Vice President, Business Development. “SAP has the customer segment specific strategies and solutions to address the unique needs of the mid-market sector. Surveys have shown customers agree that SAP Best Practices solutions are affordable, easy to implement and deliver lower TCO and a fast ROI.”

Companies employing SAP Best Practices have enjoyed lower implementation costs and quicker returns on investment. In Asia Pacific, these companies include Farmers Trading Company, Rakon (Australia); Guangzhou NCM Co. Ltd., Sparkice (China); Chien Luen Industries (China); Coship Electronics (China); Orchid Pharmaceuticals (India); PT AJBS (Indonesia); and PT Belfoods (Indonesia).

Fastest Growing CRM Vendor
In December, SAP announced that mySAP™ Customer Relationship Management (mySAP CRM) has become the CRM solution of choice for businesses throughout Asia Pacific. SAP Asia Pacific is now the region’s fastest growing CRM vendor, with more than 57% growth in software revenues in 2004. Key wins in the region include Cementhai Chemicals and Cementhai Distribution which was the first customer to go live on mySAP CRM on Unicode this year. Other notable wins include Chongqing Electric Power Corp (China), Mindtree Consulting, Bennet & Coleman, Videocon (India), Bank Islam Malaysia Berhad, DKSH CSSC (Malaysia) and Lakson Tobacco Company (Pakistan), SKC and Speedmate, SKC Co. Ltd (Korea), Komatsu (Australia), and Fujitec South Asia (Singapore).

As testament to its success in the CRM space, Frost & Sullivan presented SAP its “2005 CRM Company of the Year Award”. Frost & Sullivan said SAP’s focus on internally selling, evangelizing and motivating employees to work cross-organizationally to accomplish their objectives made SAP a worthy recipient of the annual award.

With even more industry-specific capabilities in a single, closed-loop solution, mySAP CRM is one of SAP’s most successful solutions to date. Today, over 120 customers across Asia Pacific are enjoying the business benefits of higher productivity and revenues and lower costs for customer acquisition and retention that mySAP CRM offers.

SAP also announced the availability of SAP Best Practices for CRM, a template-based solution targeted at the mid-market and smaller subsidiaries of global companies and the SMB sector. The solution, which is based on SAP Best Practices, is available for industry verticals such as consumer products, high tech, automotive, pharmaceuticals and professional services. It is able to handle cross industry CRM scenarios such as marketing, sales, service and analytics.

Organization for Growth
To further support SAP’s rapid growth in Asia Pacific and bring the company even closer to its customers throughout the region, the SAP Executive Board approved the creation of SAP Asia Pacific, which will include four market hubs—Australia and New Zealand; Japan; North Asia, including Greater China (China, Hong Kong and Taiwan), and Korea; and South Asia, including Brunei, India, Indochina, Indonesia, Malaysia, the Philippines, Pakistan, Singapore and Thailand. As part of the new structure, COO Colin Sampson and all hub leaders will now report directly to SAP Asia Pacific President and CEO Hans-Peter Klaey. The hub organization will enable SAP to focus on market synergies coming from the rapidly increasing commercial interactions between all major Asia Pacific economies.

Notable Industry Recognition
Industry and third-party recognition and endorsement increased for SAP in 2004.
Several media publications and organizations cited SAP and its solutions as
among the industry’s best and most advanced. Major awards received by SAP in
2004 include:

  • Frost & Sullivan 2005 CRM Company of the Year Award
  • Asia Freight & Supply Chain Awards 2004
  • Asia Computer Weekly Trailblazers Awards 2004
  • CWeek Excellence Awards 2004
  • Digital Times
  • Brand Power Awards 2004″
  • PCQuest Users’ Choice Awards 2004
  • Frost & Sullivan: Market Leadership Award for Mid-Market ERP Software
  • Asia Computer Weekly Reader’s Choice Awards 2004

Further, SAP’s customers also received several major awards including:

  • Nasscom-Economic Times IT User Awards 2004 (Reliance Industries, Energy:
    Indian Oil Corporation Ltd., Eicher Goodearth Limited, Hughes Software Systems
    Ltd.)
  • CIOL Enterprise Connect Awards 2004 (Tata Telecoms, Orchid Pharmaceuticals,
    Mahindra & Mahindra)
  • MIS Innovation Awards 2004 (Bank Rakyat, Bank Permata, SingTel, Infineon
    Technologies AP, Felda Prodata Systems
  • Enterprise 50 Awards 2004 (Allied Contract Manufacturing)
  • SuperBrands 2004 (Lay Hong Berhad)

We’ve made significant inroads in the mid-market space, CRM and NetWeaver and
these will continue to be SAP’s areas of focus in 2005,” said Mr. Klaey. SAP’s
business in Asia Pacific is enjoying strong momentum and we expect to sustain
the momentum this year. We are ready to quickly adapt to changes within a constantly
evolving business environment, but will remain steadfast in our commitment to
work with our partners and customers to shape the future of best run businesses
in Asia Pacific.”

Selection of Key Customer Wins for SAP Asia Pacific in 2004:

China

  • Jinzhou City Commercial Bank – Banking, LA
  • FAW-Volkswagen Automotive Co., Ltd. – Automotive, LA

Hong Kong

  • Sa Sa Internation – Retail, LA

India

  • Oil India Limited – Oil & Gas, LA
  • Bharat Electronics Limited – Public Sector, LA

Indonesia

  • PT Mulia Industrindo Tbk – Glass/Packaging, LA
  • Dynaplast – Packaging, SMB

Japan

  • KUBOTA – Automotive, LKA
  • Fuji Photo Film – High Tech, GA

Korea

  • Hyundai Oil Bank Corp – Oil & Gas, LKA
  • Coreana Cosmetics Co., Ltd. – CPG, SMB

Malaysia

  • Bursa Malaysia – FSI, LA
  • Sabro International – E&C, LA

Philippines

  • Feedmix – Feeds, SMB
  • South Star – Distribution, SMB

Singapore

  • STATS ChipPac – High Tech, LA
  • SembCorp – E&C, LA

Taiwan

  • FETC – High Tech, SMB
  • Hannstar Display – High Tech, LA

Thailand

  • Amarin Book Center – Retail, SMB
  • Datamat (Thai Airways Technical) – A&D, LKA

*“Asia Pacific” refers to SAP’s Asia Pacific business excluding Japan, unless otherwise stated