SAP Asia Pacific’s Record Business Performance in 2005 Sets Pace for Next Wave of Growth

Building on Outstanding Growth SAP Set to Transform the Industry in 2006 with Customer-Focused Innovation

SingaporeSAP Asia Pacific continues to demonstrate its strong focus on innovation, organic growth and a complete and integrated portfolio of business solutions is achieving business success in Asia Pacific and benefiting customers of all sizes in key industry sectors. The company achieved strong growth with software revenues in Asia Pacific (including Japan) increasing by 25 percent to €363 million (2004: €289 million) for 2005

According to independent research by the Economist Intelligence Unit(EIU)(1) over the next five years, IT will move from a driver of productivity to a driver of accelerated innovation, competitive differentiation and growth. As IT becomes the most critical change agent in business, SAP is focusing on supporting its customers’ growth by enabling innovative business models which will be the key to competitive advantage.

With one of the strongest product pipelines in the company’s history supporting its Enterprise Services Architecture roadmap, a strong industry focus, best practices and comprehensive services, SAP is driving its next wave of growth by transforming the way enterprises of all sizes do business. “Asia Pacific continues to be a key growth driver for SAP,” said Léo Apotheker, President, Customer Solutions and Operations and Executive Board Member, SAP AG. “The record-breaking performance of Asia Pacific in 2005 and 50 percent increase of its customer base over the past 2 years, takes us closer to our goal of tripling our customer base by 2010.”

According to the latest IDC data from Asia/Pacific Semiannual Enterprise Applications Tracker, SAP is #1 in CRM, ERM and Product Supply Chain applications in APEJ(2) for 1H 2005.

SAP Asia Pacific remarks that it continues to accelerate peer group gains with market share increasing from 46 percent to more than 70 percent over the past three years. Enterprises of all sizes throughout the region have selected SAP to deliver flexible, business-process-focused platforms that best-run businesses need for innovation-fueled growth and maximum ROI.

The signing of 1500 new customers in 2005, more than six new customers per working day, was complemented by increased customer satisfaction, customer retention, competitor replacements, and competitive wins from customers of all sizes, across all key industry sectors. SAP’s growth in Asia Pacific has also been driven by its success in the small and midsize enterprise (SME) market, with this segment now making up more than 50 percent of Asia Pacific revenue.

“2005 was a tremendous year for SAP in Asia Pacific,” said Hans-Peter Klaey, President and CEO, SAP Asia Pacific. “We accelerated our market share as enterprises of all sizes turn to SAP as their trusted advisor committed to serving their business needs for adaptive business models of the future. Our SME channel-based business has seen especially impressive growth with more than 1,100 new customers in 2005.”

“We expect 2006 to be a year of continued growth as we build on our leading position to drive a major transformation in how the IT industry is responding to customers’ needs to adapt swiftly to a rapidly changing business landscape. We are using our deep expertise in industry-specific business processes and SAP Best Practices to deliver the richest set of service-enabled, scalable process components and a business process platform that enables Asia Pacific companies of all sizes to re-compose business processes to support innovative business models.”

Enabling Asia Pacific’s Powerhouses to Remain Agile and Competitive
The small and midsize enterprise (SME) market is a significant segment for SAP, contributing more than 50 percent of total software revenue in Asia Pacific. In the small and midsize enterprise segment served by SAP’s channel partners, Asia Pacific saw a 50 percent year-on-year increase in new customers.

Building upon a growing portfolio of industry-specific small and midsize enterprise (SME) solutions, SAP Asia Pacific announces the availability of the SME Solution Center, powered by SAP Best Practices. This SAP organization integrates SAP Best Practices-based applications with lean SAP Services, enabling SAP and its partners to more quickly and effectively build end-to-end solutions customized to Asia Pacific SME’s unique needs. The SME Solution Center offering comes as SAP Asia Pacific continues to invest in SAP Best Practices R&D—conducted in the region for the region, market development resources and the enablement of SAP’s growing channel partner network. The packaged services now offered with SAP Best Practices solutions are based on SAP’s Accelerated SAP (ASAP) Focus rapid implementation methodology to reduce solution time to benefit and lower total cost of ownership.

With the SME Solution Center, powered by SAP Best Practices, customers benefit from pre-packaged, fixed-scope, fixed-price and fully upgradeable solutions designed to improve their process efficiency, business model flexibility and operational transparency for more informed and effective management decision making.

Recognizing the vital role its partners play in ensuring customer satisfaction and customer success, SAP Asia Pacific is introducing the SAP PartnerEdge™ Channel Partner Program, a next-generation channel program to provide its selected partners with enhanced infrastructure and business-enabling support to allow success and profitability for resellers, ISVs and other partners who market, develop, sell and implement SAP® solutions for the growing SME segment. The SAP PartnerEdge is the result of extensive consultation with SAP’s partners as well as its deep experience with channel best practices. Most importantly, this program will support SAP Asia Pacific’s customers by ensuring high-quality channel partners with local domain expertise that are focused on customer satisfaction and customer success.

SAP NetWeaver – IT-Powered Business Innovation
As Asia Pacific companies move to align IT with business strategy in order to drive accelerated innovation and change, they are looking to SAP as their partner of choice to provide enterprise services and a business process platform – to swiftly re-compose business processes into new business models which will drive the true alignment of IT with business. “Over the next five years, IT will become so deeply embedded into business that it will become part of the business process itself – in some cases driving the business process – rather than a support infrastructure lagging behind,” said newly appointed Chief Technology Officer for SAP Asia Pacific, Simon Dale. “Through the SAP Business Process Platform – the next generation of SAP NetWeaver – we give our customers the ability to rapidly re-compose business processes to execute on innovative business models. The business process platform creates a foundation for growth and collaboration within the IT industry by giving specialist software vendors a platform on which they can bring innovation to the entire market.”

Further underlying SAP’s commitment to empowering users with innovative new ways to drive processes and business decisions based on actionable business insight, SAP launched in 2005 100 industry-specific SAP Analytics applications. Powered by SAP NetWeaver, SAP Analytics will remain a sharp focus for SAP Asia Pacific throughout 2006, as it continues to offer customers the most powerful analytics offerings to enable customers to optimize their business processes for greater efficiency and profitability.

2006 will also see the general availability of Mendocino (product code-name) a jointly developed product between SAP and Microsoft, designed to revolutionize how information workers access enterprise applications. Mendocino ties together Microsoft Office and SAP Enterprise Software, giving customers greater visibility and use of business information from their desktop.

Raising the Bar in Customer-Driven Support
In response to customer demand for superior support and close engagement with SAP throughout the deployment lifecycle, SAP has expanded its portfolio of support services with the introduction of SAP® Premium Support. Available to Asia Pacific enterprises of all sizes, including midsize customers, the offering provides an additional option for SAP customers seeking heightened levels of support and individual attention, enhanced access to SAP expertise and new opportunities to drive down IT operating costs.

Investing for Future Business Success in Asia Pacific
Asia Pacific is one of the fastest growing regions for SAP with strong growth in 2005 and continued accelerated growth in all the regional markets, including China and India. SAP Asia Pacific will continue to invest in organic growth to continue the momentum of 2005. SAP added 3,700 new people in 2005, with more than a third coming from Asia Pacific, a 25 percent growth in headcount in the region and has plans to increase headcount by an additional 3,500 around the world in 2006. With one of the highest R&D commitments of its peer group, with R&D spend 13 percent of its global revenue, SAP intends to sustain its R&D commitment in 2006 to support customer-focused innovation and deliver on its Business Process Platform vision.

SAP’s innovative solutions and investments have been continually recognized in the region over 2005 with major awards including: International Quality & Productivity Centre (IQPC) awarded SAP the “Most Advanced Automation of a Shared Services Organisation” at the Asia Pacific Shared Services Excellence Awards 2005 and “Operational CRM Vendor of the Year”, Frost & Sullivan: Market Leadership Award for Mid-Market ERP Software, Warta EKonomi e-Company Awards for ERP Most Widely Used, Asia Freight & Supply Chain Awards 2005 Best SCM software provider, Frost & Sullivan Market Leadership Award for Midmarket ERP (India), Frost & Sullivan Market Leadership Award for CRM (India), CCW Research: No.1 Satisfaction ERP Software Product (China), Nikkei Advertising Excellence Award 2005 (Japan), China TOP CIO Customer Awards 2005, No. 1 Satisfactory ERP Software – China User CCW Satisfaction Survey 2005.

Selection of Key Customer Wins for SAP Asia Pacific in Q4 2005:

Telikom PNG Limited (Telecoms)
ETSA (Utilities)
Collex Pty Ltd (Waste) IS Waste & Recycling

New Zealand
Foodstuff South Island (Retail)
Douglas Pharmaceuticals (Pharmaceuticals)

North United Power Co., Ltd. (Utilities)
PetroChina (Oil & Gas)
China Minsheng Bank Corp. Ltd. (Banking)

Hong Kong
POSH Office Systems (HK) Ltd. (Consumer Products)
Willtech (PRC) Ltd. (Consumer Products)
Fook Tin Technologies Ltd. (High Tech)

Adani Exports (Retail)
Bajaj Steel (Metal Products)
Coal Miners (Public Sector)

PT Permata Hijau Sawit (Plantation)
PT Swadaya Harapan Nusantara (Retail)
PT Traktor Nusantara (Engineering & Construction)

Hyundai Mobis (Automotive)
KT Corp. (Telecoms)
Meritz Insurance Co., Ltd. (Insurance)

Integrated Logistics (Manufacturing)
Maxis Communications Berhad (Telecoms)
Genting Sanyen Industrial Paper (Forest Products & Paper)

MINDEF Brunei (Public Sector)
CapitaLand (Engineering & Construction)
Chong Lee Leong Seng (Industrial Machinery)

Far Eastern Memorial Hospital (Healthcare)
Chipbond Technology (High Tech)
President Chain Store (Retail)

Metropolitan Electricity Authority (Utilities)
Tsutaya (Thailand) Co.,Ltd. (Hospitality)
Unity Industrial Co., Ltd. (Automotive)

Toyota Tsusho Corporation (Mill Products)
East Japan Railway Company (Transportation)
LOTTE Co., Ltd. (Consumer Products)

Philusa Corporation (Retail)
United Laboratories, Inc. (Pharmaceuticals)
Government Service Insurance Services (Public Sector)

(1) Business 2010: Embracing the challenge of change is available free of charge.
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(2) APEJ refers to the combined countries of Australia, PR China, Taiwan, HK, Korea, India, Singapore, Malaysia, and Thailand