Asia pickup steaming ahead for Germany’s SAP

By Doug Young

HONG KONG, June 1 (BestGrowthStock) – German software giant SAP AG
(SAPG.DE: ) is seeing a sustained pickup in its Asia business, led
by strong demand from the fast growing China and India markets,
its top regional executive said.

The company saw its Asia software revenue grow 13 percent in
the first quarter, outpacing 10-11 percent growth for its global
software revenue, Stephen Watts, president of SAP Asia Pacific
Japan, said on Tuesday.

In late April, the company reiterated its previous guidance
for 4-8 percent total revenue growth globally this year, a vast
improvement over the 5 percent decline in 2009 at the height of
the global recession.

“One, two months ago it was all about cash flow and the
bottom line,” he said, speaking about SAP’s clients in the
region. “Now the discussions we’re having are about growth
again.”

Watts said he was “confident” that regional demand would
continue to improve this year and that the company’s Asia
operations were “busy” in the current quarter, but declined to be
more specific.

“Certainly if I look across the market, the conversations are
more positive; sentiment is picking up,” he said.

Asia had been one of SAP’s best performing major regions in
recent years, accounting for 15-16 percent of the company’s
global revenue, versus 12-13 percent six or seven years ago,
Watts said.

SAP, whose customers include McDonald’s Corp (MCD.N: ), Audi AG
(NSUG.DE: ) and Apple Inc (Read more about Apple stock future.) (AAPL.O: ), counted Australia and Japan as
its top regional markets in Asia, but was seeing China fast close
in on the pair, he said, adding that China sales were now at
about 70 percent of those for Japan and Australia.

“Typically these fast-growth markets are growing two to three
times faster than more mature ones,” he said.

SAP competes in China with global archrival Oracle Corp
(ORCL.O: ), and homegrown players Kingdee International Software
group (0268.HK: ) and UFIDA Software (600588.SS: ), which it is
increasingly running up against in the domestic market.

Last month, SAP announced plans to acquire Sybase Inc (SY.N: )
in a deal valued at $5.8 billion, as it moves compete with
Oracle. [ID:nLDE64C06M]

Despite the deal’s large premium, SAP argued that it made
strategic sense because it would allow it to benefit from the
“explosion in mobile data” especially in the Asia-Pacific region
where Sybase had a strong presence.

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(Reporting by Doug Young; Editing by Chris Lewis)

Asia pickup steaming ahead for Germany’s SAP