SAP Wants to Bounce Back after US Trial

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Just a few months after SAP AG was ordered to pay $1.3 billion to Oracle – ending the U.S. trial which focused on intellectual property theft claims – the German-software company is planning to restructure itself, according to a report from Manager Magazin.

The sizable amount shocked some observers given that SAP in 2009 earned after-tax profit of about $2 billion, according to MSNBC.

As part of its bounce back, SAP AG announced a goal that it will earn 20 billion Euros ($27 billion) in sales by 2015, according to Manager Magazin. Current sales are about 12.5 billion Euros (about $9.282 billion.)

SAP also wants to increase operating margins from 30.5 percent to 35 percent during the same four-year period, the report from Manager Magazin said.

Reuters reports that SAP’s sales of software products increased about a third during the fourth quarter of 2010.

SAP is expected to restructure during the current first quarter, Reuters quoted the German magazine as saying.

Reuters explained that shares of SAP “have had a rocky ride over the last few months.”

It was just not due to the recent litigation in the United States. There were rumors the company may have been the target of a takeover, according to Reuters.

Reuters also said that SAP said is hoping for margin growth of 1 percentage each year.

Reuters says that SAP can likely generate growth from new markets, according to reporting from Manager Magazin.

The new markets include on-demand software and mobility, Reuters said.

Existing markets may produce “significant revenue” for the company, too, according to Reuters.

In fact, TechZone360 reported this week that SAP software revenues for the fourth quarter increased about 34 percent to about 1.5 billion Euros ($1.999 billion). Plus, SAP also reported a 27 percent increase in its software and software-related services revenue at 3.26 billion Euros ($4.34 billion).

For all of 2010, SAP's revenue from software and software-related services increased to 9.78 billion Euros ($13.02 billion), an increase of 19 percent over the previous year, according to TechZone360.

Total revenue for 2010 increased 17 percent, to 12.45 billion Euros ($16.58 billion), TechZone360 added.

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Ed Silverstein is a TechZone360 contributor. To read more of his articles, please visit his columnist page.

Edited by Tammy Wolf
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