SAP Set to Triple Asia Pacific SME Customer Base by 2010

Number of New SME Customers Increases 50% as Partners and Customers Benefit from SAP Asia Pacific’s Recently Launched SME Solution Center and PartnerEdge Program

SingaporeSAP Asia Pacific’s complete portfolio of industry-specific small and midsize enterprise (SME) solutions is achieving record adoption in the region with SMEs across a diverse range of industries. In Q1 2006, SAP Asia Pacific (excluding Japan) signed over 300 new SME customers, representing a 50 percent year-on-year jump in new customers, many of which were “win-back” customers migrating from competing solutions. This record adoption comes as more and more SMEs look to SAP solutions to support their growth by enabling innovative business models which will be the key to sustained adaptability and competitive advantage in consolidating markets.1

Further enhancing the world’s largest portfolio of industry-tailored business management solutions designed specifically for small and midsize enterprises, SAP intends to continue expanding its reach significantly in the SME market, tripling its SME customer-base in Asia Pacific by 2010.

This growth is expected as SAP continues to invest in its expanding partner ecosystem. In 2005 alone, SAP already increased the number of SME partners by 25 percent, with similar increases expected in 2006. Globally, SAP added 5,500 new SME customers in 2005 through its partner channel alone, with the total now approximately 17,800 worldwide. Asia Pacific SME customers selecting SAP SME solutions in the first quarter include Medha Servo Drives Pvt Ltd, (India) and Trelleborg Herculles, (Singapore) for mySAP All-in-One; Kyung Chuk Co. Ltd (Korea) and ACS Fine Wines (Shanghai) Co Ltd (China) for SAP Business One. In addition, an increasing number of SMEs implemented their solutions with SAP Best Practices in the first quarter of 2006, including VK Corporation (Korea) and Hemas Holdings Ltd (India).

“Following up on a record-breaking 2005, our SME channel-based business grew even further in Q1 2006 as small and midsize enterprises increasingly looked to SAP for proven business management solutions based on industry best practices to flexibly integrate their value chains,” said Pranay Mital, Director, Channel Business, SAP Asia-Pacific. “We have been expanding our partner channel steadily, and now have nearly 2,000 qualified partners worldwide, including 180 across the region. As we continue to develop solutions and extend our market reach with our partners, we have the opportunity to change the way SMEs do business in the same way SAP has transformed business at the large enterprise level.”

Market Leadership

Based on overall software revenue, including large enterprises, SAP Asia Pacific has increased industry market share in the region from 46 percent to over 70 percent over the past three years.2

“With the SMB market expanding rapidly in countries such as PRC and India, software vendors such as SAP, which offer innovative SMB packages supported by a strong partner network, are expected to gain further success in this market segment,” said Alan Tong, Senior Analyst, IDC Asia Pacific.

#1 With Customers

SAP Business One, designed to meet the needs of enterprises with as few as 10 employees, is experiencing particularly rapid adoption by SMEs in the Asia Pacific region. One such customer, Shanghai Dewei Industrial Company (Group), based in China, notes three of the common benefits of moving to SAP Business One:

“Firstly, it is of good quality but with a competitive price; secondly, it has excellent practicability and thirdly, it enables enterprises to regulate their management, detect and avoid operating risks,” said Yang Zhen, Vice General Manager, Shanghai Dewei Industrial Company (Group). “These three characteristics make SAP Business One one of the best ERP software offerings for China’s small-and-medium sized enterprises.”

An increasing number of the more than 300 new SAP Asia Pacific SME customers signed in Q1 2006 are based in India, including SAP’s 10,000th SAP Business One customer, Indian Manufacturer Rajiv Plastics. Rajiv Plastic’s solution, being delivered by SAP Channel Partner HP, is being used to streamline an IT environment marked by isolated applications which delayed the flow of information and prevented fast and efficient decision making. [Reference separate release]

The SME Solution

To further advance its success serving the needs of SME customers, SAP Asia Pacific announced a number of new programmes in February 2006, including the SAP SME Solution Center Powered by SAP Best Practices and the SAP PartnerEdge Channel Partner Program.3

Following its launch in Asia Pacific, the SAP Asia Pacific SME Solution Center Powered by SAP Best Practices released the first Packaged Solution for Professional Services in Japan during a recent SME forum and roadshow in Tokyo and Osaka. SAP for Professional Services supports professional services providers with an integrated and comprehensive business solution which covers the complete service value chain including companies which manage their services on a project basis such as consulting firms.

By bringing best-in-class expertise in a systematic approach together with teams based all around the globe, the SME Solution Centers will build localized industry solutions based on SAP® Best Practices—methodology, documentation and preconfigured end-to-end business scenarios that support a predictable implementation time and cost. The solutions from the centers will be designed to help small and midsize enterprises leverage SAP software to quickly gain operational efficiency and deploy a flexible platform for enhancing their unique competitive differentiators. The Centers are aiming to create a total portfolio of more than 650 qualified solutions available worldwide in a wide variety of industries.

“We’ve seen partners, such as Bridge Solution Group (BSG) of South Korea, already using the power of the SAP SME Solution Center in Asia Pacific to build solutions based on SAP Best Practices and go successfully to market,” said Chris Schuler, Head of SME Solution Center, SAP Asia. “Partners like NEC, Technos, Cresco, Kobelco, Sumisei have already indicated their intention to similarly leverage the SME Solution Center to build microvertical mySAP All-in-One Solutions and we expect many more throughout the region to follow.”

Partner Power

Through the SAP Asia Pacific PartnerEdge Channel Partner program also launched in February 2006, SAP offers channel partners in the region a successful and profitable multi-tiered program to jointly drive continued growth in the SME market. SAP PartnerEdge will make it easier for partners to do business with SAP and provides the foundation to drive volume sales and to reinforce our leadership position in the SME segment. This enables SAP to support its customers’ growth through high-quality channel partners who are focused on customer satisfaction and customer success.

“The recently released SAP PartnerEdge Channel Partner Program is very impressive,” said Mr Kuhanesh Arul, Director, Business Formula (M) Sdn Bhd. “It is evident that partnering with SAP is the best choice that we have ever made, and the new partner program will enable us to take up the momentum in the small and midsize enterprise market and successfully penetrate into the mid market.”

1 Economist Intelligence Unit, “Thinking Big: Midsize companies in Asia-Pacific and the challenges of growth,” February 2006

2 SAP’s market share is calculated on based on available analyst data and projections, as well as publicly reported information from SAP’s peer group, including Oracle (JDE, SEBL & PSFT) and Microsoft.

3 SAP PartnerEdge™ Program to Drive Continued Growth in Small and Midsize Enterprises Asia Pacific Market & SAP Asia Pacific Invests in SME Solution Center, Powered by SAP Best Practices, to Deliver Next Level of Industry-Specific Solutions for SMEs