SAP unveils software for SMBs

SEATTLE: The German company based in Waldorf said that it would partner with American Express Co. to offer software and services to companies with tens and hundreds of employees and revenue of less than $100 million.

"We're going into a high-growth market," said Bill McDermott, chief executive of SAP America Inc.

"We really know how to do enterprise application software and we're winning market share right now," McDermott told Reuters in a telephone interview from New York.

SAP, which makes accounting, sales, invoicing, payroll and inventory software for large businesses, has traditionally delivered its applications on Microsoft's Windows operating systems for servers and desktop computers.

The new SAP push will seek to deliver the same software, with greater integration and ease of use, to customers on the Windows platform where it will compete against Microsoft's own small and medium-sized business software applications.

SAP's software package, called Business One, was released in Germany last year and was originally scheduled to launch in the United States by the end of 2002, according to the company.

Redmond, Washington-based Microsoft has been pouring resources into its small and medium-sized business division, paying $2.4 billion to acquire software makers Great Plains and Navision while assigning top sales chief Orlando Ayala the task of selling $10 billion worth of software to small and medium sized businesses by 2010.

'HEALTHY, LONG-TERM RELATIONSHIP'

McDermott said that SAP would continue to partner with Microsoft at the high end of the market and that there would be "plenty of elbow room" in the small and mid-sized market.

Microsoft said that is has a "healthy, long-term relationship" with SAP, but also noted that the two companies would be going head to head in the targeted software market.

"As SAP moves down into the midmarket space which is Microsoft's core target market for business applications, the two companies will compete," a Microsoft spokesman said, adding that the two companies had different distribution models.

While SAP will have to build up a distribution model beyond its nonexclusive partnership with American Express, Microsoft already has an army of resellers in the United States and Europe from the Great Plains and Navision acquisitions.

"The small and midmarket business segments are highly competitive and largely underserved today, creating a significant opportunity for multiple companies to deliver on customer needs," Microsoft's spokesman said.

SAP said that American Express, which already provides financial services to smaller businesses, will resell its software as well as a specialized version that SAP will create for the credit card and financial services company. McDermott said that SAP was aiming to boost its sales from small and medium-sized software licensing to 15 percent of total revenue in two years from the current 6 to 7 percent.

McDermott said research showed that businesses with less than $100 million in revenue spent $1.3 billion on software and that the market was growing at about 21 percent each year.