Portal purchase adds power to SAP armoury

By ADAM GIFFORD

Business software giant SAP may not be winning many new sites in this part of the world, but its ability to sell new products into its existing user base is keeping its coffers full.

Its Sapphire user conference in Brisbane last week focused on how customers could respond to today's business needs, such as supply chain planning, customer relationship management and business intelligence with modules from the SAP arsenal, rather than buying third-party software or custom development.

Top of the show-and-tell list was the SAP portal technology, brought into the company with the acquisition of United States company Top Tier.

The technology allows SAP workplace portal users to "drag and relate", dragging company symbols or other data onto links to human resources, inventory and supply chain databases or even the Yahoo! search tool, dropping them down, and having a window open to any relevant information.

While the demonstration drew the comment "very Harry Potter" from one attender, others wanted to know more about the underlying integration task - typically an expensive factor in SAP installations.

SAP's co-chairman, Henning Kagermann, said integration cost was being reduced by making connectors to common enterprise applications like Peoplesoft, 12 and Seibel available out of the box and insisting other products use open software platforms to connect, meaning the main integration cost would be interfaces to legacy software.

SAP Australia and New Zealand chief executive Chris Bennett projected that sales of portal software in the region next year would grow 60 to 65 per cent, with a consequent boost to services revenue.

He said that although SAP suffered a post-Y2K slump here last year, licence revenue for Australia and New Zealand was up this year.

"New Zealand revenue is up 50 per cent and profit up 400 per cent on last year," he said.

SAP does not disclose revenue by country.

Mr Bennett said that although New Zealand revenue would not match the peak of close to $50 million in the late 1990s, it would be somewhere between $25 million and $50 million.

With 65 customers in New Zealand, including large businesses like Carter Holt Harvey, Zespri and Telecom, SAP gets a significant revenue flow already from maintenance contracts and upgrades.

Mr Bennett said New Zealand customers were showing their typical willingness to adopt new technology early.

"If you look at SAP Portals, there are 46 sites in Australia and 11 in New Zealand, compared with nine in Japan and 10 in Hong Kong.

"With CRM, there are 26 projects in Australia and 10 in New Zealand. Business intelligence, we have 16 sites in New Zealand, 75 in Australia, 93 in Japan."

He said major portal projects on this side of the Tasman were being done by WestpacTrust and National Australia Bank.

Asia Pacific vice-president Les Hayman said the pressure was on to add new features to systems, even in tight economic times.

"We've had customers come to us and say, 'We would like to do projects to improve our situation, but we can't get a budget.' I say do it and pay us next year," Mr Hayman said.

Over the past year SAP's growth had slowed, but it continued to increase market share.

In the nine months to the end of September, revenue in the Asia-Pacific region grew 10 per cent in euros or 18 per cent in local currency, compared with 59 per cent growth the previous year.

Worldwide, the revenue growth in the first three quarters was 23 per cent.

* Adam Gifford attended Sapphire in Brisbane as a guest of SAP.