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July 27, 2010

SAP reveals strong Q2 growth

Big money deals are back, says software giant

By Steve Evans

SAP has reported strong growth figures for the second quarter of 2010, driven by a return to big money deals as companies begin spending on business software again. The firm has also raised its sales outlook for the rest of the year as a result of the Sybase acquisition.

Total revenue was up 12% to €2.89bn, driven by a 17% rise in software revenue to €637m and a 16% increase in revenue from software and software-related services to €2.26bn. This was well up on analysts’ expectations of €2.14bn.

Net income at the software giant stood at €491m, up 15% year on year.

The impact of SAP’s now-completed acquisition of Sybase means that company has raised its sales guidance for the year. It now expects to increase software and software-related service revenue between 9% and 11% this year, with between 6% and 8% of that coming from SAP’s core business, co-CEO Bill McDermott said in a conference call this morning.

Figures at the company were boosted by an increase in big money deals, especially those over €5m in value, McDermott said. He added that growth in Europe was "cautious" due to the on-going economic worries, and results in Japan were muted because of the slow growing economy there. Growth in the Americas was "outstanding", McDermott added.

SAP’s other co-CEO, Jim Hagemann Snabe, said that Business ByDesign, the firm’s on-demand offering, was seeing strong adoption. "Our success in the SME segment creates a strong foundation for the new version of our on-demand platform SAP Business ByDesign. The new version will be available on time on July 31st and is ready for volume deployment in six countries," he said.

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"Our focus on customer-driven innovation is positively impacting our growth. Reaching more than 100,000 customers is a testament to the inroads we have made in expanding our volume business and our success in the small and midsized enterprise (SME) segment," he added.

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