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Thursday, 13 August 2009 09:47

SAP grows ANZ business despite difficult, uncertain market

SAP has increased revenue in its Australian and New Zealand business for the first half of this year, with the company saying it has managed to sign major deals with new customers amidst some of the most volatile trading and market conditions it’s ever experienced.

In releasing its results for the second quarter to 30 June, and the results for the first half of 2009, SAP once again only gives us information on revenue performance - and only in percentages - with no actual dollars, which reveals nothing about how much revenue the Australian-New Zealand business actually brought in, let alone what the bottom-line for the business looks like. 

Nevertheless, even though SAP is under pressure locally from rivals like Oracle and local player Technology One, SAP Australia and New Zealand president & CEO, Tim Ebbeck, says that he’s pleased with the company’s performance in the first half in tough trading conditions, and says it has “signed major deals with new customers, strengthened and built on relationships with existing customers and taken to market a really compelling set of solutions with SAP BusinessObjects.

“In this environment, any incremental revenue growth is significant, given we had our largest year ever in 2008.  We are pleased but not complacent.  It’s still a challenging market but also one with significant opportunities.” 

Ebbeck reports that SAP increased overall revenue by 16 per cent in Q209, compared to the same period last year, and overall revenue was up by 14 per cent for the first half overall, when compared with the same period in 2008.

On the key revenue indicator of the business, software and software related services – or revenue excluding consulting, training and other services – SAP achieved 17% growth for the first half year-on-year and 10% growth for Q209 over Q208.

According to Ebbeck, key competitive wins include ERM Power, the largest privately owned energy company in Australia, and Mondial Assistance Australia - both via Extend Technologies - as well as Metcash, with other wins in the indirect business including Muir Electrical (trading as The Good Guys), sportswear manufacturer ASICS and pharmaceutical group, Ego Pharmaceuticals, and Optus extension of its SAP contract.


“The quarter also contained revenue instalments on large transformational projects underway at Queensland Rail, Australia Post and Commonwealth Bank.  Retailer Super Cheap Auto Group committed to a significant expansion of its SAP landscape, including the first purchase of SAP BusinessObjects Explorer, in ANZ.” 

On the difficult trading conditions, Ebbeck said “the antidote to uncertainty is clarity. SAP drives clarity in businesses and this is a message which has never been more relevant in the wake of the global financial crisis and a slowing economy.”
“We’ve won an unfair share of a smaller number of major transformation projects.  This type of deal was the major theme in 2008 and the prime contributor to our financial result last year.
“In 2009, we’ve seen organisations focus on smaller strategic IT projects that are designed to deliver a very specific outcome or competitive advantage without disrupting ongoing operations.”

Ebbeck maintains that SAP “anticipated these changes in purchase cycles and customer behavior” with the launch of the SAP Value Engineering initiative which he said “helps customers accurately quantify ROI in advance, while the Value Realisation process enables customers to realise on the ROI.  Our Value-based methodology has already made a critical difference to our success.”

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