SAP Canada on Wednesday said its total software licence revenue grew 44 per cent last year, thanks in part to 115 new customers it added over the same period.
The subsidiary of Waldorf, Germany’s SAP AG said it enjoyed its biggest growth spurt in the public sector, at 58 per cent. Other major segments included small and medium businesses, where licence revenues have increased 102 per cent in Canada. SAP has been trying to attract these businesses with a suite called Business One, among other offerings. SAP Canada’s education business, meanwhile, increased 36 per cent.
SAP Canada does not usually break out specific information about its operations, president Robert Courteau said, but the subsidiary wanted to paint a clearer picture of its performance amid a mostly flattened market for business applications.
Key drivers for SAP, he said, include the need to comply with a number of securities and corporate governance laws, including the U.S. Sarbanes-Oxley legislation.
“Visibility from regulatory perspective – it’s critical that you have that,” he said. “Also in projecting revenue, you have to have a solution that can deal with the full financial supply chain, something that can tell you how partners are going to perform. You have to be able to project over the next couple of quarters.”
SAP’s effort to win over enterprise customers is helped, Courteau said, by what he called an increased IT literacy among people associated with supply chain management, as well as line of business managers and even senior executives. “The CEO has strong opinions on IT and IT innovation now,” he said.
IDC Canada software analyst Joel Martin said the research firm has yet to release its enterprise market share information for 2005, but SAP was the Canadian market leader in 2004, followed by Oracle Corp.
“SAP had a tremendous growth year,” Martin said. “They’re obviously the horse that’s out in front of the race.”
SAP Canada’s employee base increased by 41 per cent last year to 801 employees, Courteau said, and it has also doubled the size of its R&D facility in Montreal to 200 people. The company hopes to attract the level of talent it needs by forming alliances with universities to train and certify students on SAP, Courteau added.
Late last year, SAP acquired Triversity, a Toronto-based provider of business software to 250 retail customers. Courteau said the integration of Triversity was well underway, and that the company had gained about 200 employees through the deal. It has since signed two customer wins, with Virgin Records and Kenneth Cole, as a result of the Triversity acquisition, he said.
While Oracle has been busily finishing up its effort to create a combined set of applications and software architecture from the many firms it has acquired, Courteau claimed the strategy isn’t working. Since SAP started tracking its share versus that of top competitors four years ago, he said, Oracle has actually lost share since its takeover of PeopleSoft/JDE.
“Acquisitions have not been a perfect model to stem the market share erosion,” he said.
On a worldwide basis, SAP’s software revenues increased 18 per cent last year to 2.78 billion Euros.