"We had significant growth in the U.S., about 23 percent. The only region to achieve a similar growth rate in 2003 was Asia-Pacific," said Leo Apotheker, president of SAP's global field operations.
In the final quarter of last year, the Walldorf, Germany-based enterprise software giant said its licensing revenues--often seen as a key performance benchmark in the software sector--in the region except Japan, soared by 17 percent compared to the same period last year. Based on preliminary estimates, the firm said its full-year software sales, which excludes revenue from consulting and maintenance services, in Asia-Pacific grew by about 24 percent from 2002.
"We wanted to grow by about 1.5 times faster than our competitors and we definitely achieved this in the region," said Hans-Peter Klaey, president and CEO for SAP Asia-Pacific.
The bull run in Asia was achieved despite heavy investments in research and development and manpower, he stressed.
In 2003, SAP expanded its R&D center in Shanghai to support the development of business applications for both China and worldwide markets and to specialize in development requests from mainland customers. A similar expansion was also unveiled for the company's research facility in Bangalore, India.
"While most companies are closing offices and cutting staff, we added 265 staff in field operations and support last year, almost the size of a new company," Klaey quipped. With the additions, SAP now employs over 3,700 workers around the region.
Breaking down the firm's revenue streams in 2003, Klaey said over half of SAP's sales in Asia-Pacific came from its existing clientele while new businesses accounted for 45 percent. This translates to more than 600 new regional customers and a 30.21 percent spike in deployments compared to 2002.
More importantly, Klaey said small and medium businesses represented two thirds of SAP's customer wins in 2003, a sign than the company's heightened focus on the mid-market is starting to pay dividends.
Mirroring a path taken by most rivals such as Oracle, the firm unveiled a slew of initiatives last year to woo companies with less than US$100 million in annual revenue. The push started with the launch of its All-in-One solutions across Asia, a simplified version of its enterprise applications targeted at midsize companies from various vertical sectors. SAP subsequently debuted its Business One applications --a set of business software aimed at smaller companies with less than 50 employees--in China and Australia.
On a country level, Klaey said SAP experienced "tremendous growth" in Thailand and India, while Singapore, Malaysia and Hong Kong turned in "respectable results".
However, he singled out China as the brightest spot for the firm in Asia-Pacific.
"SAP's software revenues in China grew by 92 percent, about 10 times China's GDP growth in 2003," Klaey said.
In spite of the licensing boom in Asia-Pacific and the U.S., SAP's software sales took a slight dip on a more macro level. According to the company's recently-released global earnings, software revenues fell 6 percent to 2.15 billion euros (US$2.7 billion) in 2003. This decline has been largely attributed to the rising strength of the euro against the U.S. dollar. The firm said if exchange rates had remained constant, its software revenues would have recorded a marginal 1 percent increase.
"2003 was the second successive year of IT expenditure decline but it saw signs of recovery in the later part of the year. Our priority in 2004 is software license growth and we hope to add 10 percent in licenses this year, "Apotheker said.
CNETAsia's Winston Chai reported from Shanghai, China.
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