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IBM, SAP alliance 'good news for retailers'


Johannesburg, 02 Jun 2004

Global IT giants IBM and SAP have formed an alliance in the retail industry which they say will allow retailers to make more efficient use of existing applications while reducing IT infrastructure costs and supporting new technologies such as radio frequency identification (RFID).

The non-exclusive partnership, announced last week at SAP's Sapphire international customer conference in New Orleans, brings together the IT retailing hardware and software expertise of IBM and SAP at a time when many retailers are struggling with the rising complexity of their hardware and software systems.

The move strengthens an existing alliance between the two vendors. In addition to combining their retail product lines, IBM and SAP say they will share consulting knowledge and enhance offerings in areas of business process analysis and best practices. The collaboration may expand to include supply chain, human resources, store operations, customer relationship management, finance and evolving technologies.

Claas Kuehnemann, Managing Director of SAP Africa, says the deal is not about technology from one vendor and applications from the other.

"It's all about helping retailers to strategically align business processes and technology, and driving costs down and revenues up," said Kuehnemann. "We have achieved some great results covering all the business processes of a retailer. We will therefore have a joint go-to-market strategy and we will operationally execute together as well."

Christian Nivoix, general manager of IBM's worldwide distribution sector, said retailers would benefit significantly from the agreement.

"On the one hand, retailers are battling a commoditisation of their products and need to find ways to operate more cost efficiently," Nivoix said in a statement. "On the other, they're having to connect more systems in their stores. We can help them reduce the complexity and increase the efficiency of their IT retail systems by offering complete integration. We're putting all our hardware and software on the table."

The deal centres on creating systems based on the companies' existing retail offerings, such as SAP for Retail, SAP NetWeaver, IBM Store Integration Framework and IBM WebSphere.

Brandon Shaban, Retail Solutions Manager at SAP Africa, says that IBM infrastructure is so pervasive in the retail enterprise, that having interoperability between IBM's infrastructure and SAP's applications is a "big win for retailers."

RFID technology, in particular, is an area where retailers see huge opportunities to increase store efficiency but, at the same time, challenges in connecting multiple devices with their software systems, says Shaban.

"Retailers, for instance, may want to take advantage of wireless PDAs (personal digital assistants) to provide real-time support but have difficulty integrating these devices with their ERP (enterprise resource planning) system," he said. "Under our new alliance, IBM and SAP will work closely together to help them integrate all this technology."

Shaban stresses that the deal will not affect existing partnerships. "It's a non-exclusive deal, which means that both IBM and SAP will continue to work with their local partners."

"IBM and SAP are continuing a long lasting alliance that has developed for more than 30 years. As the market requires more and more industry specific solutions it is a logical next step to form industry specific alliances. This enhances the existing alliance between IBM and SAP and also both Partners' ecosystems, "said Lorna Cook, Partner & Alliance manager at SAP Africa.

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SAP is the world's leading provider of business software solutions. SAP solutions are designed to meet the demands of companies of all sizes-from small and midsize businesses to global enterprises. Powered by the SAP NetWeaver open integration and application platform to reduce complexity and total cost of ownership and empower business change and innovation, mySAP Business Suite solutions are helping enterprises around the world improve customer relationships, enhance partner collaboration and create efficiencies across their supply chains and business operations. The unique core processes of various industries, from aerospace to utilities, are supported by more than 25 industry-specific SAP solution portfolios. Today, more than 22,600 customers in over 120 countries run more than 76,100 installations of SAP software. With subsidiaries in more than 50 countries, the company is listed on several exchanges, including the Frankfurt stock exchange and NYSE under the symbol "SAP." (Additional information at http://www.sap.com).

Editorial contacts

Ashleigh Fenwick
Ogilvy Public Relations
(011) 880 2271
ashleigh.fenwick@ogilvypr.co.za
Brandon Shaban
SAP Africa
(011) 235 6000
Brandon.saban@sap.com