SAP s 2005

A solid year for enterprise applications giant prospects for 2006 and beyond

SAP has released its financial results for 2005. Revenue came in at 8.51 billion Euros, or close to $10.5 billion. That represents a 12 percent bump over 2004, and 15 percent in constant currency terms. The U.S. contributed a fair chunk, $3 billion, of SAP s 2005 revenue, a 28 percent constant currency improvement over 2004. The only real blip is the flat revenue performance in Germany, where no growth was generated, notes analyst David Mitchell of Ovum. He went on to note a SAP challenge for 2006, mentioning that, to date, a relatively small number of customers has adopted SAP s enterprise services architecture ESA- vision. In 2006 SAP needs more customers to begin to adopt the new technology, and move it into the mainstream. If customer adoption is slower than SAP hopes, then it will have allowed Oracle some catch-up time, Mitchell concludes. SAP s software licensing revenue is still dominated by enterprise resource planning ERP- sales 42 percent-, followed by customer relationship management CRM- at 22 percent and supply chain management SCM- at 18 percent. Another bright spot for SAP is the 41 percent growth of the indirect sales channel, which brought in 6,000 new customers in 2005. The indirect market will grow as SAP rolls out its plans for industry versions of its Business Process Platform and expands revenue from its software partner ecosystem, notes analyst Bruce Richardson of AMR Research. Source: line56.coma>