SAP AG, the German software giant, has reported surging sales growth in 1997, but warned that the industry may experience a slowdown in 1998. For SAP?s UK operation however, business is booming.
The Walldorf-based company announced in its preliminary results that worldwide sales grew by 62 per cent to DM 6.02 billion ($3.36 billion) in 1997, driven by the success of flagship R/3 application software and demand for software to fix the year 2000 problem. Net profit climbed 63 per cent to DM 924 million ($516 million) and earnings per share were DM 8.86 ($4.94).
?By all measures, 1997 was a great year for SAP,? said Paul Wahl, CEO for SAP America, ?training, services and sales all showed that our tireless focus on the customer drives our success.?
However, the company expects a slowdown in 1998, estimating sales growth of between 30 and 35 per cent. Hasso Plattner, SAP?s co-chairman warned that this cautious outlook follows concern that demand generated by the year 2000 problem may slow in the second half of 1998, the unofficial deadline for fixing it. He also said that the company was carefully monitoring the Asian economic crisis, though he stressed that SAP ?hadn?t felt anything yet?.
Meanwhile, SAP UK experienced a massive 110 per cent revenue growth in 1997, amounting to #123.2 million, with sales of SAP licenses rocketing 130 per cent and no signs of a slowdown.
?Regarding year 2000, we expect to generate more business post 1998,? said Chris Alder, director of corporate communications at SAP UK. ?We can also see a lot of business as a result of EMU, whether Britain joins the second wave or not. We see EMU as an opportunity rather than a problem for our customers, who want an update system to compete in a more open market.?
Alder said the company experienced ?considerable success? in its small to mid-sized market programme, where it sold 30 new R/3 projects through its eight VARs in 1997.
He added that SAP?s operation in Ireland is also experiencing major growth with the addition of 11 major new customers in 1997 contributing significantly to revenues of #7 million.
SAP expects to take on another 5,000 staff in 1998, an increase of around 40 per cent. Most of these will be sales staff in North America. SAP UK anticipates a similar percentage increase this year, adding around 100 staff to bring the total to 400.
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