E-business in SA is coming of age, building on the foundations of the enterprise resource planning market which itself continues to grow strongly.
This is underscored by the outstanding results produced by inter-enterprise and e-business software company SAP and its South African subsidiary, says Dean Griffin, GM: marketing, SAP Africa.
For the year ended December 31, 2000, SAP AG's sales grew 23 percent over 1999 to EUR 6.266 billion (1999: EUR 5.110 billion) and net income increased 4 percent to EUR 626 million (1999: EUR 601 million).
mySAP.com accounted for 53%, or EUR 1.3 billion, of license revenues for 2000, which rose 27% to EUR 2.46 billion (1999: EUR 1.932 billion). Consulting revenues grew 6% to EUR 1.646 billion (1999: EUR 1.547 billion) and training revenue increased 2% to EUR 401 million (1999: EUR 395 million).
Commenting on SAP's results, co-chairman and CEO of SAP AG, Hasso Plattner, says: "All of the pieces of our e-business strategy are in place - people, products, marketing and commitment to win - and we have the customer wins and win-backs to prove that we successfully reinvented SAP. There is no other business software vendor with the product depth, industry knowledge and global reach of SAP."
"In South Africa, the excellent results are attributable to successes in both SAP's new business areas, such as e-business, and traditional ERP - now known as Enterprise Management Systems (EMS)," says Griffin.
SAP Africa achieved an impressive 61% increase in revenues in 2000 over 1999. Last year saw an increase of 174% in software revenues from SAP's new e-business offerings, including mySAP.com and CRM, and profitability was up 115%.
There was also an 89% increase in product revenue, and 10% increase in revenues from services in 2000. The only business area to experience a decrease in revenues was training, and SAP Africa has already taken steps to rectify this, including a restructuring of the division.
"Our excellent local figures are due to a number of factors including our e-business software sales, increasing market awareness that SAP delivers on its promises, and penetration of new markets, " says Griffin.
"Locally, mySAP.com revenues accounted for 63% of new software revenue in 2000. We also signed up no fewer than 19 significant mySAP.com deals during last financial year.
"Our customers have realised that the solutions we offer are best-of-breed," he says. "More importantly, SAP has lived up to its promise of delivering totally integrated e-business solutions, with regard to both front and back-office applications.
"SAP promised its customers effective, integrated e-business solutions incorporating the EMS landscape, and, unlike some other software vendors, we have proved ourselves. Analysts are now supporting us on this viewpoint."
According to Morgan Stanley Dean Witter, ".SAP has the platform, resources, and vision - as well as the home court advantage - to become a key figure in Europe's developing B2B marketplace." (Source: Morgan Stanley Dean Witter, December 22, 2000.) IDC recently reported that SAP "is reinventing itself.they have a sound vision of e-business and are genuinely one step ahead of their competitors." AMR Research perhaps summed up SAP's leading position best when it declared in December, 2000: ".SAP is ready to rumble".
"Our customers have become much more aware of the strategic importance of e-business, and are relying on us to deliver sustainable e-business solutions," says Griffin.
"Last year also saw much of the groundwork laid in 1999 come into fruition," he says. "For example, we won several deals in the public sector, a market we had invested heavily in, as well as expanding our base in the financial, manufacturing and retail sectors.
"Looking forward, 2001 looks like another very positive year for SAP Africa."
Although training revenues declined locally last year, this was as a result of a number of market shifts, including greater customer demand for onsite - rather than off-site - training, and SAP AG's decision to decentralise its role-based training model.
"During 2000, SAP Africa hosted the global development unit for SAP's worldwide role-based training," explains Griffin. "SAP AG has, however, subsequently decided to decentralise role-based training to its subsidiaries around the world, and there was no longer a need for such a large operation to be based in South Africa.
"We have now re-structured our training department to best organise ourselves to maximise opportunities presented by the market," says Griffin. "We expect to enjoy revenue growth in this area for the coming year."
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