SAP leadership change just 'business reality'

Following CEO departure, it's business as usual for company in Asia-Pacific where company's new regional head expects to see further growth.
Written by Victoria Ho, Contributor on

SINGAPORE--The departure of SAP CEO Leo Apotheker is simply a reflection of "business reality and part of business life" and will not impact customer relationships, says the company's Asia-Pacific top exec.

Stephen Watts, SAP's new president for Asia-Pacific and Japan, told ZDNet Asia in an interview here Tuesday that Apotheker's resignation this week is not expected to affect customer confidence and he remains especially bullish about the region. Effective immediately, the CEO left his post and seat on the company's board after his contract was not renewed.

While Apotheker's tenure was stung by lower sales and earnings over the last year of the economic downturn, Watts said SAP has forecast a 4 percent to 8 percent recovery in revenues this year, with the Asia-Pacific region expecting to fare closer to the 8 percent-mark.

"Southeast Asia as a whole had the strongest quarter last year in the company's history," he said, pointing to China and India as "growth engines" that saw an average of 46 percent increase in the same quarter.

Watts said SAP's market share in the region is currently the "largest of the application software vendors", where it takes 40 to 50 percent of the market in Southeast Asia. It has the largest share in Japan, he added, and is the largest multinational vendor in China--behind local provider, Ufida.

Business intelligence pulling customers
According to Gartner figures released mid-2009, SAP's share of the North American ERP (enterprise resource planning) software market stood at 26 percent in 2008. For the BI (business intelligence) market segment, IDC ranked SAP's BusinessObjects global market share top, at 20.4 percent.

Of SAP's revenues in the Asia-Pacific region, ERP software accounts for half and BI contributes to the remaining half, Watts said. "BI will be the fastest mover for us [in the region."

He explained that the high expectation in BI stems from several areas: small companies that are beginning to streamline processes, as well as keen interest from the public sector, thanks to stimulus package spending by governments last year.

Utilities was the strongest growing vertical for SAP in the region last year, with governments looking to modernize operations with investments in billing, smart metering and process integration, said Watts. "The [utilities industry] provided a very material investment across the region," he added.

In an interview last year with ZDNet Asia, SAP said BI was providing an inroad to organizations for the vendor's main ERP product. Organizations were particularly interested in BI's quick returns and comparably smaller investment commitment, compared to embarking on a larger ERP implementation, SAP said.

Watts echoed these sentiments, nothing that BI's "short and sharp" implementations help demonstrate a quicker and predictable investment rollout, of within a six month-span, for enterprise customers.

Beyond BI, companies want smaller, phrased investments across their enterprise implementations, he added. "Boards want to see results faster. The expectations of technology are higher, and this creates a [higher] level of immediacy," he said.

Watts took over the role of SAP's Asia-Pacific and Japan president in January from his predecessor, Geraldine McBride. Prior to that, he served as the region's chief operating officer.

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