SAP goes flexible to save customers

Business software group SAP AG said that it will offer more flexible contracts to help it hold on to customers. The global economic crisis and technology changes allowing customers to use software on demand instead of buying a major IT system is putting a squeeze on IT spending.

SAP has enjoyed double-digit growth in the past but its software licence sales dropped 31 per cent in the third quarter.

"We will give our customers the option to decide which software they want to use," Chief Executive Leo Apotheker said, adding clients can rent or buy.

"All in all we want to make SAP faster, simpler and more agile," Apotheker said.

Businesses such as McDonald's, Pepsi, Audi, Apple and GE are just a few of SAP's more than 92,000 customers.

SAP focused in the past on contracts with large customers but is increasingly turning towards mid-sized companies and Apotheker said the delayed Business by Design software for this segment would be launched in 2010.

SAP said it also hopes to offset the decline in licence revenue with more smaller contracts and an increase in global entreprise agreements.

SAP has high hopes for its in-memory data bank technology, which is designed to save and access data on a chip instead of a server. Intel provided the chip for the technology that SAP says will allow companies to access and analyse data in real time.

"It's like an ABS system in a car, analysing data at lightning speed and making decisions based on that so you don't hit a tree," said Apotheker, speaking to journalists in the company's Berlin office.

Apotheker said that while the worst of the economic crisis was over it was too early to speak of an upswing.

Asked about recurring rumours of Microsoft interest in SAP, Apotheker said it was company policy to not comment on such rumours.

"However, management, board, shareholders and customers see the future of SAP positively and it should remain an independent company," Apotheker said.