SAP sees 1,000 SaaS subscribers by end of 2008

SAP said Wednesday it currently has 150 customers for its Business ByDesign software as a service offering and hopes to have 1,000 Web subscribers by the end of 2008.

The target was outlined in SAP CEO's Henning Kagermann's fourth quarter earnings presentation. Kagermann added that SAP will accelerate its investments in Business ByDesign and offer new deployment options. SAP is still targeting 10,000 Business ByDesign customers by 2010 in what the company hopes will generate $1 billion in revenue.

Among other key data points:

• SAP said it had more than 5,100 productive SAP ERP 6.0 customers and is adding 500 customers a month;
• Has 29,000 SAP NetWeaver systems in the field growing at a rate of 1,000 a month;
• Claimed further market share gains.

Those data points emerged after SAP reported its fourth quarter results, which were preannounced a few weeks ago. In a nutshell, SAP remains upbeat about its prospects for 2008 and has noted that it hasn't seen a drop-off in customer demand.

By the numbers, SAP reported a fourth quarter profit of 756 million euro, roughly $1.12 billion, with revenue of 3.24 billion euro, up 10 percent from a year ago. Software revenue for the fourth quarter was up 14 percent from a year ago.

SAP's operating margins in the fourth quarter was 34.3 percent, down from 36.9 percent a year ago. Margins were crimped by investment in Business ByDesign (all resources).

As for the outlook, SAP expects revenue to increase 24 percent to 27 percent courtesy of its acquisitions of business intelligence giant Business Objects. Excluding Business Objects, SAP's revenue is expected to grow at a 12 percent to 14 percent clip.SAP is targeting operating margins of 27.5 percent to 29 percent in 2008. Margins will also be crimped in 2008 as SAP accelerates its investment in Business ByDesign.