SAP Asia Pacific Announces Stellar Business Performance in Q2 and First Half of 2005

Company Continues to Gain Market Share in Asia Pacific with Increasing Customer Satisfaction and Competitive Wins

SingaporeSAP Asia Pacific, a subsidiary of SAP AG (NYSE: SAP), today announced APA software revenue for the first six months of 2005 grew an impressive 38 percent (constant currency) over the same period in 2004, making APA the fastest growing region for SAP for the first half of the year. For Q2 2005, the region’s software revenue, excluding Japan, grew by 22 percent (constant currency) year-on-year to €61 million. SAP’s worldwide total revenues reached €2.02 billion in Q2 2005 with software revenues of €576 million.

SAP Asia Pacific continues to gain against its peer group†, with its market share in the region based on software revenues increasing more than two percentage points per quarter on average over the year from 63 percent in Q2 2004 to 72 percent in Q2 2005. The growth in Asia Pacific has largely been driven by SAP’s success in the small and midsize enterprise (SME) market, underscoring SAP’s success executing on its high volume market strategy. The signing of more than 600 new Asia Pacific customers in the first half of 2005, more than five new names per working day, was complemented by increased customer satisfaction, customer retention and competitive wins from customers of all sizes, across all key industry sectors.

“The first half year was outstanding for SAP in Asia Pacific,” said Hans-Peter Klaey, President and CEO, SAP Asia Pacific. “Our performance confirms that our customer centric strategy is on track and also how far we have distanced ourselves from other software companies with the gap continuing to widen. Our accelerated regional performance is attributable to keeping a strong focus on innovation and organic growth to build and maintain a robust, complete and integrated portfolio and continue to meet the needs of our customers with a clear, concise industry best practice roadmap for the future of their software investments.”

Customers Sail Towards Safe Passage

A growing number of enterprises have selected SAP over competing solutions as they embrace the vision of the Business Process Platform. In just the past six months, SAP Asia Pacific has seen more than 20 customers switch over from competing solutions and globally 21 PeopleSoft, J.D. Edwards or Retek customers have joined the SAP Safe Passage program since its launch earlier this year. Although only available in Asia Pacific for a short time, a number of enterprises in the region have already taken advantage of SAP Safe Passage, including United Laboratories, a leading pharmaceuticals company based in the Philippines.

SAP further extended its competitive position with the announcement a few weeks ago that its fully-owned subsidiary, TomorrowNow, will be expanding its presence into Asia with regional headquarters being established in Singapore. TomorrowNow’s presence will offer PeopleSoft and J.D. Edwards customers the opportunity to cut their software maintenance costs by as much as 50 percent.

Accelerated Growth in the Mid-Market

The midsize business market is a significant segment for SAP, contributing more than 50 percent of total software revenue in APA. Particularly noteworthy, more than a quarter of the new direct mid-market customers in the region took advantage of SAP Best Practices for cost-effective and efficient SAP solution implementation in Q2. In the small and midsize enterprise segment served by SAP’s channel partners, APA saw a 139 percent increase in new customers compared to Q2 2004 with more than 300 new customers in Q2 2005 alone. New SAP small and midsize enterprise customers in Q2 include: PT Socfin, Dharma Polymetal (Indonesia); Calcom Cements, Galaxy Surfactants (India); Isuzu Malaysia, Chemopharm Sdn Bhd (Malaysia); Qingdao Jinhua Industrial Group, Hebei Zhongji Auto Trading Group (China); Rusty, and Orion Laboratories (ANZ).

“SAP and its partners have proven they have the solutions and services that help customers innovate and grow which has forged SAP’s reputation as the ‘gold standard’ of business software,” said Hans-Peter Klaey, President and CEO, SAP Asia Pacific. “SAP’s strength and experience in working with partners to deliver industry-specific best practices to meet small and midsize customers’ needs has enabled SAP to make significant advancements into the volume-based business this year and this continues to be a crucial growth-driver for us in the region. As more and more small and midsized companies seek to improve their agility in the face of rising global competition, they recognize that it is crucial to partner with a solution provider that can deliver affordable solutions with a quick return on investment and the scalability to meet their expanding needs.”

SAP NetWeaver – The Industry-Leading Business Software Platform

The first half of 2005 saw more and more customers adopting SAP NetWeaver as the application and integration platform for their entire enterprise. Along with SAP Executive Board Member Shai Agassi’s visit to the region in early July, SAP announced its first SAP NetWeaver Independent Software Vendor (ISV) in the region, ComGroup, who has already released Asia Pacific’s first Powered by NetWeaver certified solution in China. While in Asia Pacific, Shai also launched SAP’s Software Development Network ( in Chinese and Japanese language versions. Today, more than 30,000 members of SDN come from the region, a 45 percent increase so far in 2005. SAP NetWeaver Technology Days in Bangalore, Beijing and Kuala Lumpur have also been adding to the buzz surrounding NetWeaver in the region, with five more such events planned for the rest of the year.

Investing for Future Business Success in Asia Pacific

Asia Pacific is one of the fastest growing regions for SAP with strong growth in Q2 in Korea, Taiwan, Hong Kong, Malaysia, Singapore and Australia and continued accelerated growth in China and India. This expansion was reinforced by SAP’s sustained investments in the region, including the launch of the world’s first NetWeaver Centre of Excellence at SAP Labs India in Bangalore to provide SAP ISVs and partners with a facility for development and testing on SAP’s Enterprise Services Architecture (ESA). Asia Pacific headcount has jumped nearly 30 percent from the same time last year, with further plans recently announced to double SAP’s staff in India over the next 18 months.

The extension of the SAP World Tour into Asia Pacific as SAP SUMMITs was another successful major investment in the region over the first half of 2005. So far this year SUMMITs have been held in Hong Kong, Indonesia, Korea, India, Thailand, Malaysia, China and Singapore, with more than 13,000 people gathering together to network and hear about the success of the latest versions of mySAP™ ERP and SAP NetWeaver. SAPPHIRE Tokyo was also extremely successful in Q2 with more than 12,000 attendees, a 22 percent increase over 2004.

SAP’s customer-focused investments and innovative solutions have been continually recognized in the region over the first half of 2005 with major awards including: Frost & Sullivan 2005 Asia Pacific Operational CRM Vendor of the Year Award; Asia Freight & Supply Chain Awards 2005; ComputerWorld Hong Kong 2005 Awards; and Indonesian Warta Ekonomi e-Company Awards 2005.

Selection of Key Customer Wins for SAP Asia Pacific in Q2 2005:

Australia/New Zealand
Farmers Trading Company (Retail)
Rusty (Retail)

Huiyang Techwise Circuits (High Tech)
Suning Appliance Chain Store Group (Retail)

Pantaloon Retail (Retail)
Radhakrishna Foodland (Consumer Products)

PT PLN (Utilities)
Bank International Indonesia (Financial Services)

Fuji Photo Film (High Tech)
Aozora Bank (Financial Services)

Kia Motors Corporation (Automotive)
CJ Lion (Consumer Products)

Star Publications (Media)
Bank Islam (Financial Services)

Purefoods-Hormel Company (Consumer Products)
Manila Water (Utilities)

Fujitsu Asia (High Tech)
Hong Leong Asia (Chemicals)

Wistron (High Tech)
Johnson Health Tech (Machinery, Engineering & Construction)

GMM Grammy PCL (Media)
National Health Security Office (Healthcare)