SAP Sees German Sales Growth Picking Up

By Reuters -  |  Posted 2008-03-05 Print this article Print

SAP forecasts big growth in Europe for its software.

HANOVER, Germany (Reuters) - Business software maker SAP AG expects double-digit growth in sales of software and software-related services in Germany and in Europe as a whole this year, its European sales chief told Reuters.

"I would like to see Germany also double-digit -- this is what my expectation is," Ernie Gunst said in an interview at the CeBIT information technology fair on Wednesday.

SAP's software and related services sales grew by 7 percent in Germany in 2007 and by 11 percent in the fourth quarter. In Europe as a whole, they grew by 14 percent in 2007, and worldwide they grew by 17 percent at constant currencies.

This year, SAP expects its total software and related service revenues to grow by 12 to 14 percent at constant currencies, excluding sales of products from recently acquired business intelligence software maker Business Objects.

Gunst said that despite nervousness in Europe about the effects of a U.S. economic slowdown spreading, SAP had not seen any changes in spending plans by its customers and had not frozen hiring of sales staff in Europe.

"We are getting nervous because everybody is getting nervous," he said. "We have no changes in the economic landscape when we talk to our customers."

Gunst said he saw Russia, where software and related sales increased by more than 50 percent last year, continuing to be a growth driver for SAP's European sales.

Along with France, Britain and Germany, Russia is one of SAP's most important European markets, he said.

"Those four are a big chunk of EMEA," Gunst said. "If there is economic slowdown, then it is clear the other countries will not be able to make it up."

SAP shares were up 0.4 percent to 31.41 euros by 1214 GMT, underperforming a 1.4 percent rise in the German DAX and a 2.2 percent rise in the European technology index .

Separately, SAP offered its new Business ByDesign Web-hosted software for sale at CeBIT at a price of 3,325 euros ($5,048) per month for a basic package licensing up to 25 users and 133 euros per month per extra employee.

SAP has said it will sell Business ByDesign, a key product in its drive to increase its customer base among smaller companies, for $149 per user per month in the United States.

Gunst said it was too early to tell whether the software-as-a-service model of Business ByDesign, whereby companies hand over some of their IT management to the software provider, would sell well in Europe.

In Europe, it is available so far in Germany, Britain, France, Italy and the Netherlands. SAP aims to make the software ready for the mass market by early 2009.

Software as a service is more widely accepted in the United States, where it was pioneered by Salesforce.com.

"For the moment, all lights are green," Gunst said.

(Editing by Quentin Bryar)


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