SAP believes mySAP CRM offers chemical companies a strategic advantage since its operational, analytic, and collaborative features empower employees to respond more quickly because they have a consistent view of their customers. mySAP CRM enables collaboration by distributing relevant information to internal and external communities of interest, informing customers and partners about new products, special offers, updates on new site features, and upcoming events. This improves marketing efficiency and speeds communication. Additionally, mySAP CRM helps chemical companies to grow top-line revenues by enabling more effective up-selling, cross-selling, and identification of new sales and delivery channels. Capabilities such as predefined buyer profiles, commonly sold product terms, up-to-the-minute information about pricing and availability, customer-initiated tracking, and automatically updated financial and inventory data should reduce purchasing cycle time and, therefore, the cost of transactions.
Renewing its pledge to open its products, on April 18, SAP announced it would accelerate the delivery of open, collaborative application solutions, which use open integration technology and enable customers to maximize the return on their existing IT investments, even in heterogeneous environments. The company announced it has created a new business area to focus on the next generation of collaborative solutions and that Shai Agassi, in his new role as a member of the SAP Executive Board, will be responsible for this business area.
By extending the SAP Executive Board to focus on the next generation of collaborative solutions SAP intends to demonstrate their strategic significance to the company. The business area will include development, market strategy, professional services, and business development personnel of the formerly independent SAP subsidiaries, SAP Markets and SAP Portals, as well as strategically built field initiatives and solution centers. It will focus on providing an open integration platform that unifies people, information, and business processes. On top of this platform, which combines portal, business intelligence (BI), knowledge management (KM), and exchange technology, the new business area will supposedly deliver collaborative, analytical, and commerce solutions that should run within and across business boundaries.
On the same day, SAP also announced its preliminary results for the first quarter ended March 31, 2002. In Q1 2002, revenues increased 9% from EUR 1.52 billion in the same period last year to EUR 1.66 billion (See Figure 1). While product revenues in the quarter rose 6% to EUR 999 million from EUR 943 million in Q1 2001, license revenues notably dropped 12% to EUR 402 million from EUR 458 million a year ago. More notably, net income for Q1 2002, adjusted for the TopTier acquisition costs and the Commerce One impact, was EUR 65 million, a 40% drop compared to EUR 109 million in Q1 2001. In the quarter, revenues in the Europe, Middle East and Africa (EMEA) region increased 11% to EUR 886 million and in the Asia-Pacific region (APA) revenues were up 4% to EUR 185 million.
Figure 1.
Even revenues in the Americas region rose 7% to EUR 587 million, and, at constant currency rates, revenues in the Americas would have risen 5%. Still, the continued tightening of IT budgets, especially in the US and Japan, have given raise to disappointment, particularly as license revenue in the US was down 28% (down 30% in Americas) and in Japan was down 56% (down 32% in APA). Also interesting is the fact that while the license revenue in the EMEA market was up 1%, it dropped 4% in its domestic German market.
SAP continues to take market share in sales of specific software solutions, and it also increased its personnel 3% in the quarter, mostly in Europe. In Q1 2002, software revenues related to mySAP CRM reached approximately EUR 74 million, representing a 10% growth and accounting 18% of total software license sales. Even recently considered unexciting products, mySAP Financials and Human Resources, grew at a steady 6% rate to EUR 172 million, representing 35% of license sales.
On a less positive note, the steepest revenue declines come from other newer mySAP initiatives, including mySAP SCM (with a decline of 23% to EUR 79 million), mySAP PLM (with a decline of 28% to EUR 33 million), and mySAP Portals and Exchanges (with a decline of 45% to EUR 44 million). Although the conditions for software purchases are challenging, the company still expects a much stronger second half of the year, and still anticipates revenue for the full year to grow by around 15%. SAP anticipates that the improvement will become more evident in the second half of the year as software license performance improves and the company benefits from ongoing cost curtailment measures.
Finally, as to bolster its performance in North America and to get itself in a better shape for impending intensifying bloodbath in the CRM market, on May 23, on the eve of its forthcoming SAPPHIRE user conference at the beginning of June, SAP announced that it has appointed Lo Apotheker as president of Global Field Operations. In this newly created position, Apotheker and his management team will realign SAP's worldwide sales force around the needs of global customers for consistent processes and seamless operations across geographies. The realignment will also decouple some of SAP's regional organizations to create more homogenous market segments to enable the field organization to better meet customer needs regardless of the size of their businesses. Formerly president of Europe, the Middle East and Africa (EMEA), Apotheker will oversee all SAP field operations worldwide, reporting directly to SAP Co-chairman and CEO Henning Kagermann. Apotheker joined SAP 14 years ago and launched SAP France, serving first as managing director and eventually assuming responsibility for SAP's southwest Europe region. In 2000, he was appointed to SAP's Extended Board and named president of EMEA.
Apotheker will serve as acting head of the North American region of SAP, gaining hands-on experience in SAP's largest potential market, since Wolfgang Kemna, current president and CEO of SAP America, Inc. is assuming the role of executive vice president, Global Initiatives reporting directly to Henning Kagermann. Kemna will build on the success of SAP's global strategic initiatives in CRM and Supply Chain Management (SCM), leading a new organization dedicated to these and other future strategic initiatives.
Renewing its pledge to open its products, on April 18, SAP announced it would accelerate the delivery of open, collaborative application solutions, which use open integration technology and enable customers to maximize the return on their existing IT investments, even in heterogeneous environments. The company announced it has created a new business area to focus on the next generation of collaborative solutions and that Shai Agassi, in his new role as a member of the SAP Executive Board, will be responsible for this business area.
By extending the SAP Executive Board to focus on the next generation of collaborative solutions SAP intends to demonstrate their strategic significance to the company. The business area will include development, market strategy, professional services, and business development personnel of the formerly independent SAP subsidiaries, SAP Markets and SAP Portals, as well as strategically built field initiatives and solution centers. It will focus on providing an open integration platform that unifies people, information, and business processes. On top of this platform, which combines portal, business intelligence (BI), knowledge management (KM), and exchange technology, the new business area will supposedly deliver collaborative, analytical, and commerce solutions that should run within and across business boundaries.
On the same day, SAP also announced its preliminary results for the first quarter ended March 31, 2002. In Q1 2002, revenues increased 9% from EUR 1.52 billion in the same period last year to EUR 1.66 billion (See Figure 1). While product revenues in the quarter rose 6% to EUR 999 million from EUR 943 million in Q1 2001, license revenues notably dropped 12% to EUR 402 million from EUR 458 million a year ago. More notably, net income for Q1 2002, adjusted for the TopTier acquisition costs and the Commerce One impact, was EUR 65 million, a 40% drop compared to EUR 109 million in Q1 2001. In the quarter, revenues in the Europe, Middle East and Africa (EMEA) region increased 11% to EUR 886 million and in the Asia-Pacific region (APA) revenues were up 4% to EUR 185 million.
Figure 1.
Even revenues in the Americas region rose 7% to EUR 587 million, and, at constant currency rates, revenues in the Americas would have risen 5%. Still, the continued tightening of IT budgets, especially in the US and Japan, have given raise to disappointment, particularly as license revenue in the US was down 28% (down 30% in Americas) and in Japan was down 56% (down 32% in APA). Also interesting is the fact that while the license revenue in the EMEA market was up 1%, it dropped 4% in its domestic German market.
SAP continues to take market share in sales of specific software solutions, and it also increased its personnel 3% in the quarter, mostly in Europe. In Q1 2002, software revenues related to mySAP CRM reached approximately EUR 74 million, representing a 10% growth and accounting 18% of total software license sales. Even recently considered unexciting products, mySAP Financials and Human Resources, grew at a steady 6% rate to EUR 172 million, representing 35% of license sales.
On a less positive note, the steepest revenue declines come from other newer mySAP initiatives, including mySAP SCM (with a decline of 23% to EUR 79 million), mySAP PLM (with a decline of 28% to EUR 33 million), and mySAP Portals and Exchanges (with a decline of 45% to EUR 44 million). Although the conditions for software purchases are challenging, the company still expects a much stronger second half of the year, and still anticipates revenue for the full year to grow by around 15%. SAP anticipates that the improvement will become more evident in the second half of the year as software license performance improves and the company benefits from ongoing cost curtailment measures.
Finally, as to bolster its performance in North America and to get itself in a better shape for impending intensifying bloodbath in the CRM market, on May 23, on the eve of its forthcoming SAPPHIRE user conference at the beginning of June, SAP announced that it has appointed Lo Apotheker as president of Global Field Operations. In this newly created position, Apotheker and his management team will realign SAP's worldwide sales force around the needs of global customers for consistent processes and seamless operations across geographies. The realignment will also decouple some of SAP's regional organizations to create more homogenous market segments to enable the field organization to better meet customer needs regardless of the size of their businesses. Formerly president of Europe, the Middle East and Africa (EMEA), Apotheker will oversee all SAP field operations worldwide, reporting directly to SAP Co-chairman and CEO Henning Kagermann. Apotheker joined SAP 14 years ago and launched SAP France, serving first as managing director and eventually assuming responsibility for SAP's southwest Europe region. In 2000, he was appointed to SAP's Extended Board and named president of EMEA.
Apotheker will serve as acting head of the North American region of SAP, gaining hands-on experience in SAP's largest potential market, since Wolfgang Kemna, current president and CEO of SAP America, Inc. is assuming the role of executive vice president, Global Initiatives reporting directly to Henning Kagermann. Kemna will build on the success of SAP's global strategic initiatives in CRM and Supply Chain Management (SCM), leading a new organization dedicated to these and other future strategic initiatives.
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