Executive Perspective

Bob Courteau
Robert Courteau is currently the president and managing director of SAP Canada. Courteau joined the company in January 2004 by way of EDS Corp., where he was the executive vice-president of Canadian sales and consulting services. He has been working in the technology sector for more than 20 years and is currently responsible for SAP’s business activities in Canada. Courteau — who was once a competitive skier — was raised in Montréal and graduated with a Bachelor of Commerce degree from Concordia University.

SAP last year added 115 new customers in the small and medium business space in Canada and more customers worldwide. to What do you attribute that success?

The market share improvement over the last few years for SAP has been quite impressive. When we look at our competitors in the marketplace, they’ve all suffered. Even through a strategy — I’m thinking of Oracle — of acquisition. It’s acquired those companies. It’s seen aggregate share loss in each of those acquired assets. So its whole focus has been to try and get some growth through acquisition. Ours has been through value. There’s a little bit of a difference there.

If you look in the U.S., our market share has doubled relative to Oracle over the last two-and-a-half years.

How do you plan to sustain the growth?

First of all we have the No. 1 market share across effectively every application — so ERP (enterprise resource planning), financials, product life cycle management, CRM (customer relationship management), supply chain management, supply relationship management and HR (human resources). The question is, where’s the opportunity if you’re No. 1 in those markets? The reality is we’ve identified a number of markets where we have some significant growth.

So retail comes to mind — where we have a good market penetration. We’re the leading application provider to retail, but when you take the combination of the top three, it represents only a small part of the available market in retail. What we’ve done from a focus perspective is we would buy companies that will what you call tuck in or fill in acquisition. So in retail we felt we needed to offer a point-of-sale solution and customer intelligence solution, so we bought two companies — Khimetrics and a company called Triversity here in Canada — to fill out our application focus.

But it’s rare and we wouldn’t buy a company for market share requirements. What we do is buy companies for value — where we can get value against our aspirations in the marketplace. So retail is a key focus for us in Canada. Utilities is a critical opportunity — it’s one of our highest penetrations, but also one of our highest growth opportunities. And financial services is a pretty good target for us and one that we’re starting to make progress in.

Can you talk a little bit about why you think sales in Canada are going so well?

The reason I think that we’re one of the top regions right now in SAP is that there are some things going on in Canada that are clearly driving people to look at SAP as the providers of solutions.

First of all, we’ve got a pretty good economy. And those companies in whatever industries that are doing well are really trying to not only make sure that they get organized in terms of their infrastructure, but they’re going after innovation. They’re really looking at different ways of supporting their future objectives in the business. So SAP helps them with that. Visibility is critical with the advent of Sarbanes-Oxley. People really are investing in technology to support that requirement.

I would argue that IT literacy is driving some of this as well now. It used to be that we would spend most of our time with IT departments. Now CEOs have some strong views on how they’re going to innovate and how SAP can help them get the kind of business objectives that they need.

And finally, when the Canadian dollar is at 86, 87 cents, you can’t rely on a lower cost of labour to be competitive. You’ve got to find a different way to compete on a global basis. People are trying to use technology to get the kind of productivity they need to be able to be competitive.

What kind of revenue do you expect to see from Mendocino?

We haven’t published revenue targets. This is in the class of opportunity that we see as a significant opportunity to go at a net new market. It’s the ability to create a solution for customers that’s going to combine the capability of using the desktop suite of applications of Microsoft, who is the No. 1 player in the marketplace, with the leader in business applications and create new knowledge and data in a very interoperable fashion. It’s really exciting. Virtually every customer that has SAP and Microsoft — and the overlap is significant, obviously — is going to be able to develop applications that are going to give them huge amount of productivity for the knowledge worker. Rather than building all these solutions ourselves, we really wanted to find ourselves working with companies like Microsoft that are leaders to gain its intellectual capital. We view this as a huge opportunity.

What’s your pricing model going to be?

We always — as part of our model — announce the pricing model after the ramp-up. So we see usability. We look at how customers are using it. We are doing the pricing in conjunction with Microsoft, so we haven’t finalized our pricing for the product yet.

Are you at all worried about losing your branding by burying SAP behind Office?

We have one of the fastest growing brands in the world . . . I think the brand association with Microsoft is positive. It has been so far.

Salesforce.com CEO Steve Russell recently said SAP and Microsoft are years behind when it comes to on-demand. How do you respond to that?

We’re pretty pleased with our offering. We’re pleased that customers want to work with SAP. We’re the leader in the marketplace and people will want to work in SAP in a world that wants to reduce the number of vendors that they work with.

How worried are you about open-source ERP solutions?

We are definitely in a position where we look at our growth in the marketplace and try to make sure that we focus on open standards. Open source is an emerging market area that we don’t see as a threat in the short term. We’re really focusing on making sure that we continue to put out the best products. As long as we do that in a fashion where clients can get their productivity going, we’ll be OK in the market.

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