SAP announces fortieth anniversary dividend as bold strategy changes pay off

While some technology firms are facing a tough 2012, with extensive cost-cutting and job losses, other are bucking the trend and even paying dividends to shareholders.

Apple has yet to decide if it will do this, despite sitting on $100bn in cash, but German software giant SAP has given its shareholders a boost by announcing it will offering a dividend of €1.10 per share, equating to €1.3bn.

This includes a bonus €0.35 per share to celebrate the company's fortieth anniversary. Co-chief executives, Bill McDermott and Jim Hagemann Snabe, said passing the success of the firm on was the right thing to do.

"We believe SAP's best year ever should also be our shareholders' best year ever. The proposed dividend will allow our shareholders to participate in our success," they said.

The success comes after the firm posted an increase in revenues of 14 per cent to €14.23bn for 2011 and overall profits for the year hit €4.88bn. It marks a clear turn around in fortunes for a company that has laboured for much of the recent past.

Holger Kisker, principal analyst at Forrester Research, told V3 that the success SAP is now experiencing has come after a significant shift in strategy and management that began in 2009.

"For some time SAP cut back on innovation and just decided to sell what it had, as the management at the firm was almost entirely sales personnel. However, customers did not like this as they couldn't see any future developments that would benefit them," he said.

"With the change in leadership, though, there's been a clear emphasis on innovation and acquisitions to help the firm catch-up in some of the major areas now dominating software services, chiefly mobile computing, analytics and cloud computing."