SAP eyes midmarket for growth

SAP, which classifies the midmarket as customers with fewer than 2,500 employees, anticipates half of its software revenue will come from new products by 2010; midmarket companies are expected to account for 40 percent to 45 percent of its total software sales, rising from its current level of roughly 30 percent.

"We're No. 1 in the midmarket, and nearly 50 percent of IT spending will be there. It's a key focus for us and a market where we've dedicated products," Henning Kagermann, SAP chief executive, said during a presentation to developers and reporters here.

SAP believes its midmarket sales will be fueled by such products as "Mendocino," a program being tested that links Microsoft's e-mail and calendar programs with SAP's back-office business applications.

During the next four years, SAP anticipates finishing up plans for its Enterprise Services Architecture (ESA), as well as its MySAP all-in-one business process platform.

Kagermann said that many of the changes that are expected to come in the next four years will build off the achievements of last year. Last year "was an extremely successful year for SAP," he said.

In 2005, for example, the company increased its market share while also delivering ahead of its plans for ESA, he noted.

Also last year, the applications giant dished up its next-generation MySAP business suite and its service-enabled suite for NetWeaver.

SAP, which caters to large business customers, intensified its midmarket efforts in early 2000, said Leo Apotheker, who heads up the company's sales and marketing.

As the company expands its efforts in the midmarket arena, it will be looking to the Asia-Pacific region, which is largely composed of midmarket customers, Apotheker said.