SAP Asia Pacific Japan Set to be SAP’s Number One Growth Engine

July 20, 2007 by SAP News 0

SAP APJ Growth Fueled by Region’s Small and Midsize Enterprises Adopting SAP’s Innovative Software Solutions

SingaporeSAP Asia Pacific Japan, continuing to build on its momentum from the first quarter, announced an even stronger quarter of double-digit growth across all markets for the second quarter of 2007. With significant growth results in Japan, and fast growing markets such as India and China, SAP Asia Pacific Japan is poised to be the number one growth engine for SAP.

Second quarter software revenue in the region grew 31 percent in constant currency to €107 million. Asia Pacific Japan1 Q2 software and software related service2 revenues grew 29 percent on a constant currency basis to €222 million. Total revenues in Asia Pacific grew 25 percent year-on-year in constant currency to €304 million.

SAP continued to gain share in the second quarter of 2007, marking the sixth consecutive quarter of share gains. Based on software and software related service revenues on a rolling four quarter basis, SAP’s worldwide share of Core Enterprise Applications vendors3, which account for approximately $35.3 billion in software and software related service revenues as defined by the Company based on industry analyst research, increased to 26.0 percent for the four quarter period ended June 30, 2007 compared to 25.1 percent for the four quarter period ended March 31, 2007 and 23.0 percent for the four quarter period ended June 30, 2006, representing a year-over-year share gain of 3 percentage points.

Investing for the Future in Asia Pacific Japan
SAP Asia Pacific continues to invest in robust growth and added 811 full time equivalent people in the region so far in 2007, a 10 percent growth in headcount. With SAP’s sustained commitment to innovation-fueled growth, many of those employees were added at SAP Labs in the region. Growth across the region has resulted in SAP expanding its award-winning Shared Services Center in Singapore. The center is now housed in a larger office space building, delivering HR services to SAP employees across Asia Pacific and Japan.

Accelerating Growth to 100,000 by 2010
“SAP Asia Pacific Japan has had a tremendous year so far, with dynamic growth in key markets such as Japan, India and China and continued market leadership across the region,” said Geraldine McBride, President and CEO, SAP Asia Pacific Japan. “A key to our success was the continuing embrace of SAP by the fast-growing small and midsize enterprise market. Our customers have articulated what they need, and through this customer-centric approach and a talented global team, we look forward to building on the robust growth we have achieved in our established business. Particularly in this region, with all of its potential, midsize companies are looking to partner with a trusted industry-leader like SAP.”

625 new customers selected SAP solutions in Asia Pacific in the second quarter of 2007. The signing of 525 new SME customers, nine new customers per working day, was fuelled by strong growth in India, China and Southeast Asia. In Japan, SAP also achieved significant growth in the SME sector with over 50 percent quarter-on-quarter growth. Across Asia Pacific Japan, SAP’s indirect channel partners continued to accelerate this market success resulting in 31 percent quarter-on-quarter growth.

As part of SAP’s goal to reach 100,000 customers by 2010, SAP Asia Pacific Japan has committed to triple its small and midsize enterprise (SME) customer base. The SME market already contributes more than 40 percent of SAP’s total software revenue in Asia Pacific Japan. In the small and midsize enterprise segment served by SAP’s channel partners, Asia Pacific Japan saw a 30 percent increase in software revenue year-on-year in Q2.

Building on its commitment to empower small and midsize customers with new ways to leverage software for business growth and success, in the first half of this year SAP has announced more than 80 new additions to its portfolio of qualified SAP All-in-One industry solutions offered by SAP partners. SAP has also introduced enhancement packages for Business One, a new series of downloadable packages as part of SAP standard support that offers customers faster and more frequent access to new functionality, best practice tools and maintenance updates.

Business Process Platform of Choice
The wide acceptance of the Business Process Platform is demonstrated by the vigorous pace of SAP® ERP and SAP® NetWeaver sales. SAP NetWeaver sales grew 59 percent year-on-year in the first half of 2007, and at the end of Q2, SAP Asia Pacific Japan gained 88 new SAP NetWeaver customers, and had over 1,200 customers on the latest version of SAP ERP. Governance, Risk and Compliance (GRC) revenue grew 88 percent quarter-on-quarter, with SAP seeing many GRC firsts – including a win with PT Astra International – in Malaysia, Indonesia and China. Further empowering customers to make GRC management an integral part of their business and IT strategies, SAP announced earlier this year its plans to acquire OutlookSoft Corporation, a privately held provider of integrated planning, budgeting, forecasting and consolidation software. Together with SAP’s financial capabilities in SAP ERP, SAP solutions for GRC, and the strategy management software from Pilot Software, SAP now has all of the pieces in place for a portfolio that supports CFOs to meet their responsibilities, particularly in non-automated areas of the business.

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Selection of Key Customer Wins for SAP Asia Pacific in Q2 2007:

Australia
The Australian Postal Corporation (Logistics and Postal)
Pharmaserve (Retail)

New Zealand
Kordia Group Limited (Wholesale)
Fonterra Cooperative Group Limited (Consumer Products)

China
Anyang Iron & Steel Group Co., Ltd Primary (Metal)
Happy Life Insurance (Insurance)

Hong Kong
Asahi (H.K.) Ltd (Consumer Products)
Pizza Hut Hong Kong Management Ltd. (Food Industry)

India
Subhiksha Trading Services Pvt Ltd (Retail)
Artemis Medicare Services Pvt. Ltd. (Healthcare)

Indonesia
Satrindo Mitra Utama (Heavy Industrial Equipment)

Japan
Tokyo Electron Limited (High-Tech)
Tokuyama Corporation (Chemicals)

Korea
Kraze Korea (Food & Beverage)
Woonglin Passone (Automotive)

Philippines
Neltex Development Co., Inc. (Chemical)

Singapore
NTUC Income Insurance Cooperative (Insurance)
CapitaLand Limited (Engineering and Construction)

Taiwan
Merry Electronic Co., Ltd. (High Tech Electronics)
Teco Image Systems Co., Ltd. (High Tech Electronics)

Thailand
Thoresen Thai Agencies Public Co. Ltd. (Shipping)
Chinatrust Commercial Bank (Banking)

Footnotes
1 “SAP Asia Pacific Japan” refers to the company’s operations, including Japan, Australia and New Zealand.

2 “Software and software related services revenue” equals the total of “software revenue” plus “support revenue” (formerly called “maintenance revenue”) plus “subscription and other software related services revenue.”

3 Core Enterprise Applications Vendor Share: Beginning in the first quarter of 2007, the Company began using software and software related service revenues for defining Core Enterprise Application Vendor Share because the Company believes that this is the most important indicator for vendor share oriented analysis with the realignment of its income statement structure. Prior to the first quarter of 2007, the Company had been using software revenues for defining Core Enterprise Application Vendor Share.

The Company provides share data based on the vendors of Core Enterprise Applications solutions, which account for approximately $35.3 billion in software and software related service revenues as defined by the Company based on industry analyst research. For 2007, industry analysts project approximately 7% year-on-year growth for core Enterprise Applications vendors. For its quarterly share calculation, SAP assumes that this approximate 7% growth will not be linear throughout the year. Instead, quarterly adjustments are made based on the financial performance of a sub set (approximately 25) of Core Enterprise Application vendors.


For more information, press only:
Ben Wightman, SAP, +65 6768-6493, GMT +8
Deborah Dingle, Burson-Marsteller, +65 6829-9315, GMT +8