Strong Growth from Inside
We continued to pursue our strategy of organic growth in 2007, increasing software and software-related service revenue by 17% on a constant-currency basis. This result significantly exceeds our forecast. It is an excellent bill of health for our core business, which remains very profitable. The results were slightly hampered by the additional investments announced in early 2007 for SAP Business ByDesign. We are convinced, however, that these short-term investments will reward us with medium- to long-term benefits.
SAP Business ByDesign completes our offering for small business and midsize companies. We are already market leaders in that area, and have been since 2005, with our products SAP Business All-in-One and SAP Business One.
With SAP Business ByDesign, a newly developed product with a new business model, SAP has entered the on-demand market. Unlike the on-demand products from other vendors, however, SAP Business ByDesign supports all business processes that customers require. Our portfolio now encompasses solutions for enterprises of all sizes and in all industries. Our industry expertise in particular is one of SAP’s key strengths.
Co-innovation within a network of partners is essential in the software industry. Working with our partners to gain new know-how and generate fresh ideas enables SAP to stay decisively ahead of the competition. We are therefore enhancing our own research and development organization with many other centers of innovation, ranging from select universities (including our University Alliance program), industry forums and online communities to the Co-Innovation Lab opened in Palo Alto, California, in mid-2007.
Secure Innovations for our Customers
Because of our uncompromising commitment to fulfilling our customers’ requirements and our innovation leadership, we can continually provide the right products to add value and create competitive advantages for our customers. This illustrates the changed role of enterprise software: Whereas efficiency and cost reduction were once the primary concern, today’s enterprise software increasingly focuses on providing new ways to add value and differentiate companies from the global competition. This shift is enabled by a business process platform based on our enterprise service-oriented architecture (enterprise SOA). With this platform, it is much easier for companies to implement process improvements and new business models.
In 2004, we drew out a road map to establish enterprise
SOA – a task we have now completed with the release of
SAP ERP 6.0. The more than 5,100 customers using
enterprise SOA in production at the end of 2007 are the
strongest evidence for the success of this innovation
strategy for SAP Business Suite, complemented by the 29,000 live installations of SAP NetWeaver. For our customers,
this spells greater agility and productivity, but also
ensures significantly easier implementations of future
innovations. Instead of having to carry out complex upgrade
projects, customers can now choose new functions
and implement them using SAP enhancement packages.
This form of delivery adds new capabilities to customers’
software without the risks to system stability that were
inherent with traditional upgrades.
In December, the latest release of our customer relationship management (CRM) application, SAP CRM 7.0, part of SAP Business Suite, was received with great excitement. Our developers successfully united new functions with significantly improved usability. The user interface is based on Internet technology and also works on mobile devices. As this combination of usability, functionality, and flexibility is still a rarity in the world of enterprise applications, the demand for SAP CRM 7.0 is understandably very high.
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