SAP looks to ride out crunch

The credit crunch could affect markets for as long as the next 18 months, according to the UK and Ireland managing director of SAP.

In a wide-ranging interview discussing the factors that will affect SAP's performance over the next year, Steve Rogers said there has definitely been a change in SAP's customers' attitudes to IT.

"It has gone from 'what will make my business grow?' to 'how do I batten down the hatches?'," he said.

"There has been a slowdown generally, and my gut feeling is that it will last another 18 months or so."

Rogers said that SAP is looking to strengthen growth in emerging markets less affected by the credit crunch.

As well as the BRIC nations, this includes the Latin American market, the Middle East and Africa.

Earlier this year it was announced that Business ByDesign – a software-as-a-service product for SMEs and long touted by SAP as key to its revenue strategy – would be delayed by at least year.

Shares in the company slumped as investors worried that the delay of such a key part of SAP's strategy would hit profits.

Rogers denies this.

"It won't have a massive impact. We will largely be able to service customers with other offerings in the SAP kit bag."

The firm reported an 18 per cent increase in revenue in the second quarter of 2008, up to €2.86bn (£2.26bn) from €2.42bn (£1.91bn) in the same period last year.

But net income dipped nine per cent to €408m (£323m) from €449m (£355m) in the second quarter of 2007.

See also:

SAP revenue up 18 per cent

Worst of slump is over, says software giant, but UK users unhappy about rising support costs  29 Jul 2008

UK SAP users furious over support price hike

Mandatory change and increased costs has led to complaints  25 Jul 2008

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