Report: Investors question SAP growth strategy

After software vendor identified mobile products and services and in-memory data analysis software as cornerstones for long-term growth, shareholders now asking for German company's roadmap, Bloomberg reports.

Shareholders are seeking clearer understanding from SAP's co-CEOs over how the software maker aims to achieve its goal of making 5 billion euros (US$7 billion) from its mobility products, services and data analysis software, according to a Bloomberg report Wednesday.

The news agency said shareholders flocked to Germany to meet SAP's leadership team, where co-CEOs Bill McDermott and Jim Hagemann Snabe were expected to divulge more details on how the company planned to reach its 2015 sales target of 20 billion euros (US$28.18 billion).

More importantly, investors were reportedly keen to learn how it was planning to hit the 5 billion euros sales target from its mobility and in-memory analytics products. This projection indicated a shift away from the company's core ERP (enterprise resource planning) business which accounted for 72 percent of SAP's 12.5 billion euros (US$17.6 billion) sales generated in 2010, reported Bloomberg.

Snabe had revealed during a recent media conference: "In three years, ERP will have lots of mobile screens and a lot of in-memory-based capabilities." This, Bloomberg noted, was indicative of how mobility and in-memory would have a "huge influence" on SAP's 20 billion euros sales target.

Fellow CEO McDermott had added that the two top executive brought "a certain humbleness, a certain intellectual curiosity and patience for listening" to the company's employees and customers, after taking over the top position from previous CEO Leo Apotheker.

"You keep your promises. You do this one quarter, one year at a time and you stay true north to your vision. And we'll be there at 20 billion euros (US$28.18 billion) by 2015," McDermott said.

Already, the mobility and analytics products are making a positive mark in markets such as Asia-Pacific. Stephen Watts, president of SAP Asia-Pacific and Japan, told ZDNet Asia in a February interview that analytics had clocked the fastest growth in the company's fourth quarter earnings report, and added that its Hana in-memory analytics appliance was garnering strong interest globally as well as in the region.

However, according to the Bloomberg report, some industry analysts are not completely convinced. Thilo Mueller, a portfolio manager at Germany-based MB Fund Advisory, said: "Many investors believe SAP's product portfolio has potential but we want to see proof and we probably won't see that for another two, three years." Mueller noted that he has yet to have a "big aha!" moment with the company's new management.

Others are prepared to be patient. Jella Benner-Heinacher, a representative of the DSW German shareholders association, told Bloomberg that "in all likelihood" it would take a couple of years at least before the strategy SAP outlined would prove to be the right one or not.

"If you consider the Googles and Microsofts of this world, every day another company is being acquired in this industry that changes the makeup of the market and it will be interesting to see how SAP positions itself," he surmised.