HONG KONG – February 25, 2005 – SAP Hong Kong announced at a media briefing today that in 2005 it would place a renewed focus on Hong Kong’s small-and-medium business (SMB) sector and sustain dominance in local industry segments to drive growth and build upon the strong results achieved in 2004.

“Our success in 2004 is evidence of how we have increasingly become a trusted partner for Hong Kong businesses looking for better ways to quickly adapt their business models and drive internal efficiencies,” said Lee Boon Lee, Chief Operating Officer, SAP North Asia, and President, SAP Hong Kong & Taiwan. “Organizations look to IT as a way to boost competitive advantage and SAP will continue to be their business partner of choice. Building on the success of 2004, SAP Hong Kong looks to accelerated profitable growth, increased SMB and overall application market share and business application platform leadership through SAP NetWeaver™ in 2005.”

SAP Gains Momentum in SMB

In Hong Kong, the SMB sector continues to gain momentum and SAP expects to leverage on the growth of this segment through the company’s successful two-tiered SMB strategy. SAP Business One® offers growing SMBs – from as small as ten employees – a simple yet powerful integrated solution that is affordable, easy to install and easy to use. This solution addresses accounting, reporting, logistics and sales force automation needs, and is one of the few software solutions designed to help small businesses make customer relationship management (CRM) part of the business automation process. Another SAP offering catering to the SMB sector is mySAP All-in-OneTM, which delivers a pre-packaged turnkey solution built for companies that require a business system with high degrees of industry-specific functionality.

In 2005, SAP Hong Kong intends to double the revenue generated from the SMB segment through its partner program. “The need to address market challenges on a real-time basis and the need for improved compliance are driving SMBs to integrate business information into a single version of truth across the organization for effective and efficient decision-making. With mySAP All-in-One and SAP Business One solutions, SAP – along with our SMB Channel Partners – is delivering constant business value to thousands of such SMBs, helping them quickly gain competitive advantage with minimal costs,” noted Mr. Lee.

A key objective of the partner program is to selectively recruit and develop partners that demonstrate strength according to specific industry segments, industry knowledge and experience. SAP Business Partners will add value to customer relationships through their local presence and business understanding; a strong channel of selected and certified partners not only cements long-term relationships with partners based on a profitable business model, but also leaves SAP well placed to serve unique local market needs.

SAP Remains Dominant in Local Industry Segments

SAP will also continue to place a priority over delivering relevant solutions to the High-Tech, Consumer Products, Retail and Financial Services industries, as these prove to be high-growth areas.

“SAP remains committed to helping emerging businesses in Hong Kong that have the potential to become market leaders in their respective segments. More local enterprises are turning to SAP as their trusted partner as they seek to grow their businesses, mitigate risks and enjoy rapid return on investment,” noted Mr. Lee.

Significant Business Growth for SAP In 2004

In 2004 SAP’s proven and successful strategies in the SMB and local industry segments have enabled it to increase its new customer wins four-fold from 2003 to 2004. SAP Hong Kong achieved customer wins from a diverse range of organizations, spanning Government to multinational Hong Kong companies, to small-and-medium businesses. In Hong Kong, notable customer wins for SAP throughout the year included Sino United Publishing (Ltd.); cosmetics giant Sa Sa International Holdings Limited; jewelry chain company Tse Sui Luen and consumer electronics conglomerate TCL Corporation. In addition, key customer wins within the SMB sector include restaurant chain Yeh Lam Kwok Restaurant (Group); CyberSpeed and Wing Keung Medicine.

Technology Trends Impacting Hong Kong

SAP also provided its insights, derived from a third party report, into some of the major technology trends currently facing Hong Kong businesses at the briefing. Two of the key observations that were made were:

• Adaptability and innovation are key to success: As Hong Kong companies continue to explore ways to differentiate themselves from industry peers, their ability to quickly adapt new business models and respond to rapidly changing business environments will be an increasingly important driver of competitive advantage in the future. Companies that continue to improve on their business models, as well as their customer, partner and channel relationships, will become the winners in the future. Technology will be a key enabler of not only cost efficiency, but will also help companies achieve better agility and improve customer knowledge and servicing.
• Adopting technology to capitalize on opportunities: With many Hong Kong companies looking to expand and evolve their role – for example, from an original equipment manufacturer (OEM) to original design manufacturer (ODM) and, ultimately, to an outright brand in a company’s own right – technology will play a key role in enabling companies to expand, not only from a business point of view, but also geographically.

“The adoption of new IT systems and understanding technology trends is vitally important to businesses in Hong Kong, as companies look to adapt and increase their competitive advantage to stay ahead in increasingly open and customer-driven markets,” continued Mr. Lee. “Companies will increasingly need to change according to shifts in customer demand, and will have to build innovative business models and execute them through business network ecosystems of suppliers and channels – simply, product and service differentiation will no longer be enough for success.”

Driving Industry Innovation Through NetWeaver

An important focus in 2005 is SAP NetWeaver, the foundation platform for all of SAP’s applications. With SAP NetWeaver, companies can rapidly execute new business strategies and processes in a cost-effective way, as it supports open industry standards and interoperability, allowing for ease of integration with both SAP and non-SAP systems and enabling Enterprise Service Architecture, SAP’s blueprint for a services-oriented architecture. The NetWeaver platform is the first to deliver a unified set of technology and application services that support the innovation and business needs of all enterprises.

SAP is also leading the way with its Business Process Platform by enriching the SAP NetWeaver composition platform with ready-to-run business processes which are accessible through enterprise services.

“SAP is well positioned to help Hong Kong businesses by offering solutions based on an open and adaptive business platform such as SAP NetWeaver, so that customers can easily and cost-effectively leverage existing and future technology investments to realize maximum business profits,” said Mr. Lee. “Furthermore, the Business Process Platform provides speed to market, efficiency and scalability for SAP and gives our customers a platform that supports business flexibility, agility and competitive advantage in demand driven environments.”

Strong Performance In Asia Pacific

SAP’s success in Hong Kong was witnessed similarly throughout the Asia Pacific region as SAP Asia Pacific, a subsidiary of SAP AG (NYSE: SAP), recently announced it exceeded 2004 performance targets with total 2004 Asia Pacific total revenue of €480 million. This represented 20 percent year-on-year growth [24 percent at constant currency]. Software revenue for Asia Pacific grew 30 percent [35 percent at constant currency] to €175 million during the same period. The company’s Asia Pacific operations ended 2004 strongly with Q4 total revenues of €146 million, up 26 percent over the same quarter in 2003 [28 percent constant currency]. The signing of more than 1,000 new Asia Pacific customers in 2004 was complemented by both increased customer satisfaction and customer retention and supported by the hiring of more than 1,140 new employees in the region. SAP extended its market share against its peer group based on software revenue by six percentage points in 2004 to 67 percent.

About SAP

SAP is the world’s leading provider of business software solutions*. Today, more than 26,150 customers in over 120 countries run more than 88,700 installations of SAP® software—from distinct solutions addressing the needs of small and midsize businesses to enterprise-scale suite solutions for global organizations. Powered by the SAP NetWeaver™ platform to drive innovation and enable business change, mySAP™ Business Suite solutions are helping enterprises around the world improve customer relationships, enhance partner collaboration and create efficiencies across their supply chains and business operations. SAP industry solutions support the unique business processes of more than 25 industry segments, including high tech, retail, public sector and financial services. With subsidiaries in more than 50 countries, the company is listed on several exchanges, including the Frankfurt stock exchange and NYSE under the symbol “SAP.” (Additional information at http://www.sap.com)

(*) SAP defines business software solutions as comprising enterprise resource planning and related software solutions such as supply chain management, customer relationship management, product life-cycle management and supplier relationship management.

For more information, press only:
Sarah Chan, +852 2539-1847, sarah.chan@sap.com, GMT +8
Adrian Fu +852 2963-6715, adrian_fu@hk.bm.com, GMT +8