Enterprise-applications software giant SAP has agreed to buy Ariba for $4.3 billion in the German company’s second multi-billion purchase in the cloud computing arena, furthering its efforts to take on Oracle.

SAP will pay $45 a share or 20 per cent more than Ariba’s May 21st closing price.

The transaction, subject to approval by Ariba shareholders and regulators, is expected to be completed by the end of August, SAP chief financial officer Werner Brandt said on a conference call.

Ariba is the leader in cloud- based collaborative commerce applications, counting BHP Billiton and Deutsche Bank among customers it connects to more than 730,000 suppliers.

As competition in on- demand software intensifies, SAP has increased its pace of acquisitions, last buying SuccessFactors in December.

With businesses increasingly choosing to store and process data on the web, SAP is shifting many of its staple applications to the internet.

“We don’t have the DNA in the cloud,” SAP co-chief executive officer Bill McDermott said in an interview. “We’re probably the most strategic cloud player in the enterprise software industry.”

Source:http://www.irishtimes.com/newspaper/finance/2012/0524/1224316606709.html

Two in five users of BusinessObjects business intelligence software have said that the support provided by SAP is not as good as other software vendors, according to a new user group survey.

This was just one of the findings from the UK&Ireland SAP User Group survey that indicated a need for SAP to engage more with its BusinessObjects customers.

The research also found that 57 percent of SAP BusinessObjects users found it difficult to use SAP’s Service Market Place support portal, and that 63 percent said it was hard for them to search and find relevant support information.

Alan Bowling, chairman of the UKI SAP User Group, said: “These figures show that there is still more work to do when it comes to supporting and communicating with BusinessObjects users.

“We have an important role in ensuring that they are able to effectively interact and influence SAP.”

Craig Dale, chief executive at UKI SAP Group, added: “We are working with the SAP customer experience team to see how they can improve the experience, and we are looking to put together a customer advisory council, set up specifically for the support portal.”

Despite users’ percieved problems with SAP support, there has been a trebling in the number of existing SAP customers using BusinessObjects – 21 percent at present, compared to just seven percent last year.

“As we see more SAP customers using BusinessObjects tools, now we’ve got the customer expertise feeding back to the user base. Having that expertise will allow us to leverage that for the wider SAP community,” said Dale.

In addition, a higher proportion (76 percent compared to 69 percent last year) of users are now using the latest version of SAP’s core ERP business suite, ERP 6.0, which the user group believes indicates that more members are realising the functionality and support benefits of upgrading to the latest release.

According to Dale, the rate of adoption of the latest version of technology among members of the user group was higher than among non-members, because they have access to more educational initiatives from the user group.

“We’ve got customers wondering if they have to go on to more expensive maintenance packages, or upgrade to the latest versions. Both have cost implications.

“We are working on bringing that knowledge and education to the customer base so they can make an informed choice,” he said.

The user group surveyed 312 SAP user organisations and 96 BusinessObjects user organisations in the UK and Ireland.

Source:http://www.cio.in/news/businessobjects-users-call-better-support-sap-260712012

SAP AG (SAP) plans to show this week it has learned from a flawed venture into Internet-based software five years ago with its new strategy for cloud-computing, months after the $3.4 billion purchase of SuccessFactors Inc.

Investors’ attention at SAP’s Sapphire conference in Orlando, Florida, will be on Lars Dalgaard, the SuccessFactors founder who joined SAP’s global management board last month. Dalgaard plans to explain how SAP can generate 2 billion euros ($2.6 billion) in sales from software delivered over the Web by 2015 to help the Walldorf, Germany-based company reach its 20 billion-euro revenue target by then.

The market for on-demand software will grow five times faster than the traditional on-premise programs that are dominated by SAP, according to researcher IDC. With the cloud- computing market already crowded with providers such as Salesforce.com Inc. (CRM) (CRM) and Amazon.com Inc. (AMZN) (AMZN), SAP will need to show how it can apply SuccessFactors’s strength in delivering cloud applications to its core money makers, programs that run routine functions like financial accounting and inventory management.

“To really make the cloud an opportunity rather than a threat they need to move their traditional functionality to the cloud,” said Leon Cappaert, who manages 400 million euros, including SAP shares, at KBC Asset Management in Brussels. “The worst-case scenario for SAP would be if a big cloud competitor rises that has all the functionality that SAP has built.”

Salesforce, Workday
Cappaert cited Salesforce.com, the biggest provider of online customer-management software, NetSuite Inc. (N) (N) and Workday Inc. as the main rivals SAP has to tackle in that market.

SAP first got into cloud-computing in 2007 with its Business ByDesign software, which offered more bite-sized management tools to companies with 100 to 500 employees that couldn’t afford to set up their own servers and install SAP’s staple software.

The product, which cost $500 million to introduce, fell short of plans and was revamped and introduced again in 2010. By the end of last year, the on-demand software attracted more than 1,000 clients, still far less than SAP’s initial targets.

Companies are turning to cloud computing as a secure way to outsource data centers and reduce the need for pricey servers and other hardware. Forrester Research Inc. last year estimated that the software-as-a-service market will grow to $133 billion by 2020 from $21 billion last year.

Integration Path
SAP’s confidence in SuccessFactors, which specializes in software used to manage employee performance, made it pay a 54 percent premium to SuccessFactors’s share price in December. SAP Co-Chief Executive Officer Bill McDermott called SuccessFactors the “crown jewel” in the industry and Dalgaard “the best cloud executive in the world.”

Dalgaard, a 44-year-old Danish-born executive who speaks eight languages, is scheduled to address the annual Sapphire conference tomorrow.

“It is critical for Mr. Dalgaard to demonstrate how he will integrate the SuccessFactors’s and other cloud applications into SAP’s core systems, without impeding SuccessFactors’s innovation,” Adam Wood, a Morgan Stanley analyst in London, wrote in a May 11 note.” As companies become more willing to run applications in the cloud, we believe the integration question could become more important.”

McDermott and Jim Hagemann Snabe, who have been running SAP as co-CEOs February 2010, also oversaw the acquisition of Sybase Inc., which added database technology and software for smartphones and other mobile devices to SAP’s product range.

Challenging Oracle
At the three-day summit, SAP also plans to unveil applications for its Hana software, which lets clients rapidly analyze large amounts of data by bypassing slower hard drives.

Some of the most recent applications include sifting through cancer patients’ genetic information within seconds to help suggest therapies, a process that would normally take hours or days.

SAP is also using Hana to target the No. 2 spot by 2015 in the $22.5 billion database market that is dominated by Oracle Corp. (ORCL) (ORCL), taking on providers including International Business Machines Corp. (IBM) (IBM), Microsoft Corp. (MSFT) (MSFT) and Teradata Corp. (TDC) (TDC)

The Germany company wants to displace some of the Oracle database that’s sold alongside its applications and replacing that with Hana installations. Hana software to more than double sales this year from 160 million euros, SAP said.

SAP will also reinforce its mobile-software offering by making applications available via the cloud, Sanjay Poonen, the company’s head of global solutions, said in an interview. Plans include hosting mobile-device management system on Amazon Web Services, he said this month.

Hana Outlook
Still, as SAP’s top brass gather in Florida, they need to reassure shareholders after first-quarter license sales, including Hana, missed estimates. So far, investor confidence helped send the stock 20 percent higher this year, compared with Oracle’s 5.3 percent gain. Salesforce.com, an early entrant into the cloud-computing market, has jumped 36 percent.

“SAP is one of the few stories within the European technology sector that investors are really excited about because they have these specific new product cycles which should help them support their growth,” KBC’s Cappaert said. “If Hana disappoints again and we don’t get positive signals from the conference, then the stock may be under pressure.”

Source:http://www.businessweek.com/news/2012-05-13/sap-seen-boosting-cloud-to-vindicate-successfactors-deal