SAP taps into mid market for growth

Enterprise software maker SAP reported a €2.02bn (£1.4bn) revenue for the most recent quarter, up 13%, thanks in part to its focus on small and medium-sized companies.

The company's core business of software licence sales grew 16% to €576m and net income rose 16% to €289m. 

Regionally Europe realised 9% growth, America grew 27% and the Asia Pacific region 23%.

SAP president of customer solutions and operations Léo Apotheker credited a large increase in the sales to small and medium sized organisations as the main source for the growth.

'We fuelled growth through volume business. […] We increased the number of deals by 23%, driven more and more by the indirect sales force,' Apotheker said.

The German home market was a major weak spot in the past quarter with software sales declining by 13%. SAP blamed the poor results on delayed investments by government organisations due to elections, as well as a reorganisation of SAP's sales force.

Japan saw sales shrink by 11%, SAP warned. The vendor said it struggled in competing with applications that were developed in house.

The US in particular is at the forefront in the battle between Oracle and SAP over dominance in the market for enterprise applications. Both companies have created defector programmes that offer rebates to users who switch vendors.

Apotheker said that SAP's Safe Passage programme has helped the vendor gain 21 new customers, including biotechnology company Amgen and Samsonite.

The battle with Oracle is putting pressure on prices, the executive said.

'We have a competitor who believes pricing is its only weapon left. We know how to deal with that as well.'

The German software vendor claimed that it was the 'clear leader' in North America and said it further increased its lead over the competition.

Oracle in the last quarter reported a 52% sales increase for its enterprise software division to $350m (£199m). The company didn't provide a regional breakdown for its applications business.