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SAP Pushes CRM in Latest Bid for SMB Sales: Page 2

By Richard Adhikari     Feedback
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So far, it's won at least a few converts to its way of thinking. Small and midsized businesses constitute about 75 percent of SAP's overall customer base, having grown about 28 percent from the previous year, the company said at its SAPPHIRE Orlando conference earlier this month.

Additionally, the company has teamed up with other major players to penetrate the SMB market. Its partners have unveiled more than 80 solutions in the All-in-One line, all products for small vertical markets.

With HP (NYSE: HPQ), it has announced an All-in-One solution with its SAP MaxDB database and Novell (NASDAQ: NOVL)'s SUSE Linux Enterprise preconfigured on HP BladeSystem and HP ProLiant servers.

SAP also expanded a strategic partnership with IBM (NYSE: IBM) to offer Big Blue's Power Systems, System x and BladeCenter servers bundled with SAP Business All-in-One. The bundles also included either IBM's DB2 or SAP's MaxDB databases running on Novell's SUSE Linux Enterprise Servers or IBM i, formerly known as i5/OS.

Meanwhile, SAP's rivals have also enlisted partners to broaden their SaaS-based offerings as well. iEnterprises, for instance, has enabled Microsoft Dynamics CRM access from Research In Motion's (NASDAQ: RIMM) BlackBerry.

Although SAP recently announced that it was porting its CRM applications natively to the BlackBerry, it may not fare as well as the iEnterprises/Microsoft solution.

SAP's move "won't play in the SMB market because it's an adjunct to the larger product, and that kind of high-end enterprise function is something that's going to appeal much more to the larger companies than the midmarket," Greenbaum said.

That may prove problematic, considering how high the stakes are high for SAP in the space. Efforts to woo the midsized market to its solution come against a backdrop of weakness in its core ERP business, particularly in the U.S.

The latest quarterly survey by ChangeWave Research on planned software spending showed a sharp drop in expected ERP purchases over the next 90 days, with an 11 percent decline from January's figures. Among ERP vendors, SAP is faring the poorest according to ChangeWave, with a 12 percent fall in intent-to-purchase.

The company also remains plagued by market troubles in the U.S., laying off hundreds of employees here. On Sunday, co-CEO Henning Kagermann told the press in Berlin that while business conditions in the U.S. were still "challenging," they weren't getting worse.

Additionally, he said demand in Europe and Asia remains strong, a claim that follows announcements earlier this month that SMBs are adopting the company's business software especially briskly in Brazil, China, India and Russia.

This article was originally published on May 20, 2008
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