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SAP to keep investing in R&D despite crisis

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CIOL Bureau
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HANOVER, GERMANY: Germany's top software maker SAP plans to keep investment in research and development relatively stable to weather what it calls the worst economic crisis since the 1930's.

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"This crisis is unique...but we will continue to invest and continue research and development," SAP co-Chief executive Leo Apotheker said at Europe's biggest technology trade fair CeBIT in Hanover on Tuesday.

Apotheker said some investment projects had ended last year, and in the long run SAP's investment budget would be around 12-13 per cent of annual sales.

In 2008, the R&D budget was around 14 per cent of core revenue. Apotheker declined to give a percentage for 2009, saying it would depend on revenue development.

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SAP, the world's biggest maker of business management software, gave no target for its key software and software-related sales this year. Its margin forecasts are based on the assumption core sales would be flat or 1 percent lower than 2008 sales of 8.62 billion euros.

Apotheker warned that cutting costs too much in a recession could be dangerous.

"You shouldn't save yourself to death, that was tried in the 30's and we all know where that got us," referring to the global economic crisis during that time.

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SAP, which implemented cost savings in October after sales dropped sharply, said it would continue to reduce costs and cut some 3,000 jobs -- a first in the company's history.

Apotheker said the programme to reduce its workforce was underway and that no further job cuts were planned at the time.

SAP, which took on its largest acquisition ever when it bought BusinessObjects in 2007, does not rule out further purchases.

"We will however not make an acquisition (just) because prices are down. The culture, business has to fit as well," Apotheker said.

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