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Follow UsEric Auchard
NEW YORK: SAP AG is grabbing share from rivals across a range of market
segments and has surged to become the top supplier of the software businesses
use to manage suppliers and purchasing, co-chief executive Hasso Plattner said
on Thursday.
Speaking in the vindicated tone of an industry veteran still wounded by
previous criticism that Europe's largest software maker had "missed the
Internet," Plattner said in an interview that SAP has recaptured the
momentum smaller players once had.
"Hype, vision and perception are losing. Deliverables, execution and
reality are winning among customers these days," Plattner told Reuters
following a news conference at SAP's global marketing headquarters. "We
give customers confidence."
Earlier, SAP reported strong sequential growth in revenues and profits that
beat financial analysts' estimates for the third quarter running. The results
marked the distance German-based SAP is putting between itself and many of its
mostly US-based rivals who have succumbed to a global spending slowdown.
SAP, which makes software that helps firms connect their key business
operations to the Internet, believes its size, stability and broad customer base
has helped it win over rivals with more specialized product lines, including
Ariba Inc., i2 Technologies and Siebel.
Victory of the strongest
On Thursday, Plattner said SAP was now the No 1 supplier of eProcurement
software used to connect corporate customers with suppliers, displacing Ariba,
the company that pioneered this business and captured much media attention in
doing so.
Plattner said SAP had surpassed the ailing Ariba in the first quarter, in
terms of the number of customers. He believes his company has now surpassed
Ariba in revenue, although Ariba disputes this. Ariba reported a wider loss and
its recently named chief executive resigned on Thursday. Plattner also declared
victory in another segment, "supply chain management" software, which
has been previously associated with companies such as i2 and Manugistics.
SAP surged past Dallas-based i2 during the second quarter to become the No.1
supply chain management software firm worldwide, he said. SAP posted $150
million in revenue against the $106 million in license revenue i2 reported late
on Wednesday in its quarterly results.
SAP has benefited from its large base of existing customers and increasingly
wide acceptance of its mySAP.com e-business suite, which custom tailors how
employees doing different tasks see the Internet and relate to colleagues,
analysts say.
After a difficult two-year transition period, SAP has switched focus from
enterprise software run within big corporations to an open Web-based strategy
built around desktop portals and private marketplaces which allow companies to
collaborate with their customers and suppliers.
SAP officials said during the news conference that 48 per cent, or roughly
half of their revenues, came from manufacturing customers seeking to tie their
materials purchasing to assembly and distribution lines. The success SAP is
having selling new products that automate purchasing, procurement, supplier
relationships and sales and marketing functions mean manufacturing will grow as
a percentage of sales over the next few quarters.
Next target Siebel
SAP has targeted also the so-called Customer Relationship Management market
that Silicon Valley-based firm Siebel Systems Inc. has dominated. While Tom
Siebel, the company's founder and chief executive, declared this week that his
company does not see SAP as a major competitor, Plattner said that SAP is
quickly gaining momentum, and market share, with an eye to displacing Siebel as
the top CRM solution provider.
"A year ago we were probably not visible to Siebel in the customer
relationship management market. Now we are one-third of his revenues in this
segment. If Siebel doesn't see us coming, he makes a mistake," Plattner
said in an understated tone that belied the sometimes harsh rivalry between the
two companies.
Taking note of Siebel's comments that his company saw European sales
weakening in the second half, Plattner said SAP was seeing no such thing.
Siebel's problems in Europe stem from SAP gaining ground in customer service
software, he said.
Of arch-SAP rival Oracle Corp., the big database software maker that is
seeking to extend its reach into many of the ebusiness software and applications
that SAP is targeting, Plattner said "We are clearly gaining market share.
It looks a little cheap when we do our own comparisons", he said, adding
that the momentum had reversed in favor of SAP and away from Oracle, the
fast-mover at the height of the dot-com economy a year ago.
There is little love lost between SAP and Oracle Chairman Larry Ellison, both
highly competitive yachtsmen, who have traded barbs back and forth for years.
"If there is a momentum shift, this is not a seasonal thing, this is a
long-term thing," Plattner said. "This (shift) is visible for two
quarters and I think it will continue."
(C) Reuters Limited 2001.