SAP Africa beats budget with strong licence sales

SAP Africa, local arm of the global business software leader, produced financial results for the year to end-December that made sub-Saharan Africa one of the top-performing regions for SAP AG, its parent company.

SAP AG, listed on the Frankfurt and New York stock exchanges, today [Wednesday 26 January 2005] released its results for the 2004 financial year to 31 December [See accompanying release].

Although the parent company does not release figures for its regional or country operations, SAP Africa managing director Claas Kuehnemann says the local subsidiary had a very strong year, exceeding both its performance in 2003 as well as its budget for 2004 significantly.

He says the core of SAP Africa's performance was strong sales of new software licences. "We are particularly pleased with the number of strategic gains in the public services, financial services, mining and retail sectors. The specific solutions SAP has developed for these and other industries have been a deciding factor in these strategic gains, where we have regularly been chosen over best-of-breed competitors," says Kuehnemann.

Further contributions to the financial performance came from the launch of mySAP ERP as the replacement of the company's R/3 application that gained popularity in SA in the 1990s, and the launch of two major new applications for the small and medium business markets.

In 2005, Kuehnemann expects to see most businesses moving from the defensive posture of recent years to a more growth-oriented stance. "After a few years of consolidation where they were mainly concerned about getting value from their previous investments, CEOs are looking to maintain productivity gains while trying to establish sources of sustainable differentiation. We expect the focus of demand to shift increasingly to flexible IT platforms that enable companies to innovate business processes rapidly," he says.

SAP Africa's targets for 2005 include the public sector and continued focus on financial services, mining and retail sectors. Kuehnemann expects the SAP All In One and SAP Business One products to make further inroads into the SMB market where the company will continue to develop its channel partner business model.

"We also believe it will be a while before there is any easing in the uncertainty for both customers and vendors created by the takeover and consolidation activity in the business software market. SAP's approach is to offer support and guidance to companies that are uncertain how developments affect their IT strategies."

A new kind of convergence is expected to be the source of the most significant shift for SAP in 2005. "The worlds of applications and infrastructure that for many years operated virtually independently are now converging as a result of new developments in both software and hardware. The new terrain, which has been called 'applistructure', is very important to SAP and we have already made significant investments to ensure that our applications are at the centre of this convergence," says Kuehnemann.

"This convergence will have fundamental implications for the business software market. We think SAP has made a good start and has been recognised by several major analyst firms as the credible leader in the convergence of applications and infrastructure. In the longer term we anticipate this will be a source of continued growth for SAP Africa."