SAP sees growth from new businesses

PARIS/MUNICH Thu May 19, 2011 12:29pm EDT

SAP co-chief executive Jim Hagemann Snabe speaks to a journalist at an IT summit in Dresden, December 7, 2010. REUTERS/Thomas Peter

SAP co-chief executive Jim Hagemann Snabe speaks to a journalist at an IT summit in Dresden, December 7, 2010.

Credit: Reuters/Thomas Peter

PARIS/MUNICH (Reuters) - SAP (SAPG.DE) expects to achieve significant sales in its new mobile and high-performance analytics software products this year, co-Chief Executive Jim Hagemann Snabe said on Thursday.

"Already this year, the first year, in both those two categories, we will be able to do more than 100 million euros ($143 million) in revenue," he told the Reuters Global Technology Summit on Thursday.

SAP has high hopes for its mobile and so-called in-memory data bank technology, which is designed to make analytical software more powerful by accessing data stored locally on a chip instead of on a server.

It plans to fold this into its core software products over time, helping it to reach revenue of 20 billion euros by 2015, up from 12.5 billion last year.

The German company, based in Walldorf near Heidelberg, has built its business on large, integrated software systems it has sold to many of the world's biggest companies, such as Apple (AAPL.O), GE (GE.N), McDonald's (MCD.N) and Pepsi (PEP.N).

But it has been slow to adjust to new trends such as mobile working and on-demand services in which businesses outsource computing to companies with big server farms.

However, the company has begun to gain traction with its SAP Business ByDesign on-demand business management software product, which targets mid-sized companies.

Snabe told the summit that at the rate Business ByDesign was acquiring customers, SAP would likely hit its target of around 1,000 before the end of the year.

Business ByDesign was not yet profitable, however, Snabe said, due to ramp-up and marketing costs.

SAP currently has some 170,000 customers and bills itself as the world's leading provider of software for managing supply chains and customer relations.

Asked if SAP was looking to grow through acquisitions, Snabe said: "Our focus is on innovation.. there is no need for acquisitions."

The company expects its key non-IFRS software and software-related service (SSRS) revenue, which includes revenue from license sales and maintenance services, to rise by 10-14 percent this year at constant exchange rates.

It said recently it expected the results to come in nearer the top of the range.

"We increased the range to indicate there is an upside opportunity here we want to go after," Snabe said. "But we're still early in the year, we haven't closed Q2 yet... let's see how Q2 goes and probably then we can have a talk about the outlook for the year."

Full-year operating profit is expected to be in a range of 4.45-4.65 billion euros and the operating margin is expected to rise by 0.5-1.0 percentage points.

(Editing by James Regan)