With third quarter profits up 86% at $140.3m and revenue up 82% at $791.8m, king of business software SAP AG expects that it should achieve 50% growth for the year as a whole – if currency exchange rates, which provided a fuel-injected boost to third quarter overseas sales, continue. For the nine months revenue was up 61% at $2.12bn. The growth is further ahead of the company’s own predictions earlier in the year. SAP is now effectively basking in a reputation that no-one ever gets sacked for buying SAP these days. And because the market for this types of manufacturing software is growing so strongly, it doesn’t even notice the effect of smaller and nimbler software sold against it by the likes of Oracle Corp and PeopleSoft Inc. SAP R/3 is still a huge and complex application, and if it doesn’t fit an organization as it comes, it’s time, as the company has told us itself in the past, to call up the consultancy cavalry. Compared with the third quarter of 1996, American sales rose 113% to $291m; in Germany they were up 27% to 160m; in the rest of Europe they rose 91% up to $152m, and in Asia/Pacific they were up 106% to $113m. The proportion of revenue generated outside its home base continues to edge up – from 73% to 79% compared with last year. 62% of revenues are generated by R/3 sales now, with the mainframe-based R/2 software in slow decline, but still contributing $93m in revenues. Version 4.0 of the product due to ship in volume by mid-1998. Putting that potentially messy insider dealing investigation behind it, SAP will now list on a US stock exchange in the third quarter of 1998, about a quarter earlier than it had originally planned.
