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Follow UsSiobhan Kennedy
NEW YORK: German software giant SAP AG on Wednesday unveiled big partnerships
with computer makers such as IBM and Compaq, and high profile deals with
customers from the Pentagon to Shell Oil in moves that show off its shift into
Internet-based computing.
Europe's largest software company even enlisted Ray Lane, the former No. 2 at
arch-rival Oracle Corp. and Michael Capellas, chief executive of Compaq Computer
Corp., to endorse its strategy - under which SAP said it will partner with
companies rather than trying to build everything itself.
"We probably did not realize how much more opportunity we could have if
we reach out and work together with other systems," chief executive Hasso
Plattner said during his opening remarks at SAPPHIRE, SAP's annual US user
conference being held in Orlando. "We have learned this now."
SAP - which in recent years has come under much criticism for not moving to
the Internet fast enough - was staging a comeback with its mySAP.com set of
Web-based applications, Plattner said. "SAP was perceived as a loser 1-1/2
years ago. We never perceived ourselves as losers ... we always had relatively
good results," Plattner told over 6,000 users at the show.
As evidence of that, the software maker said in the last year it has
quadrupled, to 4 million, the number of users of its mySAP.com application
package. The news, plus a series of partnership announcements with International
Business Machines Corp., Compaq and Palm Inc., sparked an almost 3 per cent rise
in the software giant's share price.
SAP's widely traded preferred shares moved up 4.8 euros, or 2.8 per cent, to
close at 171.30 euros on the Frankfurt stock exchange. Its ordinary shares
traded up 5.49 euros to 171.10, a gain of 3.32 per cent. Its more thinly traded
New York Stock Exchange-listed shares traded up 0.55 per cent to $36.49 in
mid-afternoon action.
"The customer base of mySAP.com has risen enormously and I think the
most important partnership is with IBM. SAP is really developing into a world
leader in software," said Theo Kitz an analyst at private bank Merck Finck
& Co, adding that this was generating momentum for the share price.
New partnerships
SAP said it struck deals with Palm and Compaq, two leading handheld computer
makers, to enable companies to custom deliver SAP information to employees
wirelessly.
"We have become so Internet-addicted that we absolutely have to be
connected all the time," Capellas said, adding the growth of Compaq's iPaq
handheld PC was "one of the fastest ramp-up of any product I've ever
seen." In addition, SAP also agreed to expand its broad services and
software partnership with IBM.
The German company also said it had a preliminary agreement with Royal
Dutch/Shell Group to build a global logistics and procurement system for the
world's No. 2 energy supplier to connect Shell's operations in 130 countries.
In addition, SAP signed a $40 million deal with Acterna Corp. the No. 2 maker
of network testing equipment, to use its mySAP.com applications on a worldwide
basis. SAP also said it won a blanket purchase deal with the US Department of
Defense that will allow units of the military to sign up and use the mySAP.com
software system.
The wide-ranging agreement has no specific dollar value, only the possibility
of future contracts, SAP said. It followed the successful completion of a test
project with the US Naval Air Systems Command, which is now ready to sign a
33,000-user delivery order for the mySAP.com software.
"The slower economy is a gold mine for these guys," said Bruce
Richardson, an analyst with industry research firm AMR Research in Boston, who
was also invited on stage to quiz Plattner during his keynote presentation.
Richardson said SAP's customer base of more than 15,000 companies would look to
SAP, not to third party companies like Oracle and i2 Technologies Inc., to wring
the most out of their software investments.
"This is the year of the ERP vendor," Richardson said, referring to
the enterprise resource planning software that SAP develops for uses such as
finance and human resources. Ray Lane, former No. 2 at SAP's arch rival Oracle
said SAP's strategy, to partner with other firms rather than trying to do
everything itself, was the right way forward.
"The basis of the major disagreement between Larry (Oracle Chief
Executive Larry Ellison) and myself was that one vendor can do it all,"
Lane said. "One vendor can not do it all."
(C) Reuters Limited 2001.