SAP is one of the largest business management software and solutions providers in the world and we caught up with their President of Europe, Middle East and Africa, Franck Cohen, when he paid a visit to South Africa.
1. How successful was 2011 for SAP?
It was a very good year for SAP overall. We grew our software revenue by 25% on a global basis, which is in itself a great performance. It is very clear that we gained market share last year. It was the best year ever for SAP, with €4-billion in software revenue and it was also the best year ever in terms of total revenue, with €14.2-billion of revenue, with Europe, Middle East and Africa representing about 50% of this number. Overall, last year was a great performance, a great vintage for SAP and very promising for 2012.
2. How will SAP be able to sustain the growth from 2011?
I think that we are also cautiously optimistic that we will continue with this trend of growth. We have announced and given some guidance to the market that we will grow our total revenue between 10% and 12%. So of course Europe, Middle East and Africa are important parts of it. What is important for 2012 is the fact that SAP is now embarking on five different market categories — Application, Analytics, Cloud, Mobile and Database.
3. Could you expand on the Cloud and Mobile categories?
You may have seen that we have now completed the acquisition of SuccessFactor, which is the largest cloud business company in the world. They have 15-million users that are using their systems, which is 3 times more than Sales Force. And of course we are going to build on top of that very aggressive cloud strategy, initiated with the fact that we now have a dedicated sales force to sell our cloud solutions in Europe.
(For mobile) we made the acquisition of Sybase a couple of years ago, so as a result of that, SAP has developed a lot of mobile applications that are being used already by many our customers. Mobile applications represented €100-million in revenue for SAP in software last year, starting almost from scratch. So we have created this new dimension. Why is that important? We believe that mobile will become the preferred device for the next generation. We decided to challenge the status quo that is saying the desktop is the normal device to use for SAP. We believe that mobile will be the normal device to use for SAP in no time. We believe that tablets and smartphones will become the number 1 device that most of our users will use on a daily basis. There are millions of tablets and smartphones in the world — a lot more than desktops — that is why we want to continue to develop our applications on all mobile devices.
4. Could you please elaborate on HANA?
This is an in-memory computing kind of database, and we believe this is going to change the IT landscape for years to come. We believe this is a much better way to store data than using disc servers and we have already initiated this development. So HANA became generally available in June 2011, and have already sold more than 120-million units of HANA software in six months. So that is the fastest product in terms of sale that we have ever launched in SAP history. And this continues to be probably the fastest growth product, because we are investing into this platform. With HANA, we are combining in-memory computing with current store database, with a very high algorithm of compression of data and with massive power of processing.
This combination gives it a unique capability to analyse a massive amount of data in a fraction of the time that it was necessary before. To give you an example, we have applications with 10 000 times better performance than before. So what is very interesting is not only the performance, it is more than that. Storing data in memory costs a lot less than storing it in normal disc servers. First of all you do not need a data base, second is that you do not need those massive environments with disc server farms, because you do everything in memory. And the cost of the DRAM has been decreasing significantly in the last few years. So the total cost to ownership ratio is 1 to 20, on average.
5. What plans does SAP have for Africa?
When it comes to Africa it is important to say that we are going to combine our efforts with our Sybase colleagues here and in the rest of the continent to develop the business between SAP and Sybase, so we are joining our forces physically right now. We have very large ambition for Africa, for South Africa in particular, and Africa in general. As you know Africa is a market lead for us, which is headquartered here (Johannesburg) but covers the whole continent. And our objective of course is to expand our footprint into the rest of Africa. And that is why I am here (in SA) — to support this growth plan and to develop this growth plan. We opened offices in Kenya, Nigeria, Cameroon and the idea is to now continue the process and move to the next step. So the CO will be here in August and I think one purpose of the meeting is to assess opportunities, so that we can come up with a much more aggressive growth plan moving forward. We will for sure continue to invest in Africa in order to develop the business and that will be the case in South Africa — where we have a lot of opportunities to grow — but also in the rest of the continent.
Charlie Fripp – Online editor