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September 24, 1998

SAP CONTINUES PUSH INTO MID RANGE MARKET

By CBR Staff Writer

SAP AG may be the world’s leading ERP (Enterprise Resource Planning) vendor but the German software giant admits it has some work to do when it comes to overcoming the perception that its software is too cumbersome and tricky to implement- a perception that’s widely held, in particular, by small and mid-range companies. While Allen Brault, director of business development, SAP America says the negative image applies to the whole ERP market in general, he’s also aware that SAP, as the number one supplier, attracts most of the flak. Our competitors are feeding that frenzy in advertising and marketing campaigns, he told ComputerWire, they’re extrapolating the high-end scenario, where R3 implementations are typically part of a bigger project, to the mid-market. Brault said at the high-end, SAP’s traditional stronghold, companies usually roll out R3 as part of a complete re-engineering of their business processes, but when you get down to the mid-range market, companies aren’t looking to re-engineer, he said. For that reason, he said SAP had developed a number of initiatives, namely Accelerated Solutions, the Certified Business Solutions (CBS) program and Ready-to-Run (RRR), all aimed at making R3 simpler to install and operate for mid-sized companies, who aren’t as cash-rich or technologically cutting edge as the global players. And at its user conference, SAPPHIRE, in Los Angeles last week, the company added another module, Accelerated HR, to its list of pre-configured, easy-to-install applications, as well as launching its EasySAP campaign. But despite its efforts, many analysts at the conference expressed concern that the software giant wasn’t doing enough to address the mid-market and although it has holds between 30% and 35% of the total market, SAP can’t afford to be complacent. Although one analyst admitted: I think a lot of it is just perception, but that’s still a problem for SAP. Their indirect channel is doing very well in the mid-range, it’s remarkable that they’ve got 300 customers, but I don’t know about their own sales force. Brault pointed out that by far the largest proportion, 34%, of its sales, were in the mid-range, the sub $200m revenue companies where SAP only sells through the indirect channel, although he couldn’t give specific customer wins or revenue amounts for its mid-range salespeople. But the perception battle is a real thing, and it’s something I’m charged with working on, Brault said, But we think we’re going the right way about it with our Accelerated Solutions and other initiatives. He added that SAP was now receiving calls from mid-sized companies where, before, it didn’t even get a look in. He added that the mid market would be hearing a lot more from SAP in the upcoming months, including further additions to its Accelerated Solutions application line-up.

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