First enterprise business applications vendor to surpass $12B in revenues

SAP has shown steady growth in revenue, earnings, and margins in recent years, and at 24 percent has the largest share in the core enterprise applications space by far of any IT vendor. Yet with the recent abrupt resignation of wunderkind Shai Agassi, and a subsequent front-page article in The Wall Street Journal exposing fissures between Waldorf, Germany-based corporate headquarters and devel...

07/01/2007


SAP has shown steady growth in revenue, earnings, and margins in recent years, and at 24 percent has the largest share in the core enterprise applications space by far of any IT vendor.

Yet with the recent abrupt resignation of wunderkind Shai Agassi, and a subsequent front-page article in The Wall Street Journal exposing fissures between Waldorf, Germany-based corporate headquarters and developers in California, the crown doesn't rest as easy as might have been hoped.

The future of technology markets is ultimately unknown, but what SAP has already done is notable. Many say it was SAP that first brought enterprise systems to the corporate boardroom, and its solutions are the systems of record in a wide range of industries.

For global corporations, the scale of operations a single instance of SAP ERP can encompass is staggering.

A conglomerate of diverse businesses such as BP —one of the world's largest energy companies—can run its drilling & refining operations, its retail outlets, and its complex banking and financial operations all on a single enterprise system.

To manage its finances, human resources, and supply chain, The Coca-Cola Company uses a single instance of SAP ERP for 15,000 users in 45 countries—encompassing 175 legal entities. Moreover, many of Coca- Cola's bottlers are SAP users too, constituting a network of more than 1,000 production plants, a delivery fleet five times larger than that of UPS, and somewhere between $85 billion and $90 billion of annual revenue.

Coca-Cola recently spent six months examining possibilities for further efficiencies. After looking at 400 processes and 100 data elements, it found more than 90 percent of the bottler's business processes are common across entities.

To take full advantage of the synergies, Jean-Michel R. Ares, Coca-Cola senior VP and CIO, says, “Service-oriented architecture is the key to success here.”

For all its work with the largest corporations and with cutting-edge technology, SAP stresses its efforts to reach the midmarket—companies with revenues of less than $1 billion—and positioning itself as a provider of infrastructure with the NetWeaver middleware suite.

From the beginning, SAP stuck to the idea that organic software development is intrinsically better than integrating acquired functionality. For the most part it has held to that, making only smaller, strategic acquisitions.

Within manufacturing, the purchase of Lighthammer several years ago demonstrated SAP's abiding interest in plant floors, but only to have a gateway to disparate data rather than a comprehensive mapping of overly diverse plant environments.

More recently, SAP purchased the assets of Factory Logic, a lean software vendor.

In January 2007, SAP launched a new version of its SAP All-in-One solutions—its software for midsize companies—and soon will release a new version of SAP Businesss One for small businesses.





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