SAP Reaches Out to Chinese, Brazilian Users

SAP is targeting Chinese and Brazilian companies less than a week after talking up the importance of both markets at the business applications vendor’s annual U.S. Sapphire user conference in Orlando. In separate formal announcements Tuesday, SAP intensified an already-close relationship with leading Chinese IT services and training firm Neusoft Group and opened a new global services center in Brazil.

SAP’s agreements with Neusoft included taking a minority equity stake in the Chinese company. The firms didn’t reveal financial details of the all-cash transaction, but media reports pegged the investment at US$12.8 million.

In another tie-up with SAP subsidiary SAP China, Neusoft will extend the range of training it offers Chinese customers on SAP software by launching a dedicated SAP practice and more than tripling the number of SAP-focused staff it employs. Taken together, the deals are set to position Neusoft as a major training and development resource for SAP in China.

In specific SAP software terms, Neusoft committed to adopt SAP’s NetWeaver technology as a software development platform for some enterprise applications and to increase its value-added reseller (VAR) partnership for mySAP All-in-One software, which is aimed at midsize businesses.

The actual signing of the agreements was a high-profile event taking place Monday in Beijing and attended by both Chinese Premier Wen Jiabao and German Chancellor Angela Merkel on her first trip to China since taking office as chancellor in November 2005. Wielding the pens for the IT companies were SAP Chief Executive Officer Henning Kagermann and Neusoft Chairman and CEO Liu Jiren.

Last week at Sapphire, Hasso Plattner, SAP’s co-founder, suggested that the company’s biggest competitive threat within the next five to 10 years might be posed by a Chinese company, not current rival Oracle. For that reason, he said it is vital that SAP continue to establish its presence in Asia and be a major player in the region. However, SAP’s Kagermann said he sees Chinese business software players as rivals only in the local Chinese market, not as a global force.

Turning to Brazil, SAP said it has opened a new global service center on the University of Vale do Rio dos Sinos (Unisinos) campus in Sao Leopoldo. The center will focus on custom development and localization services for SAP users in the Americas. By year’s end, SAP expects to add as many as 80 employees.

The Brazilian center is one of nine SAP global service centers around the world, with other sites in China, Germany, Hungary, India and Japan.

In January, SAP merged its North American and Latin American business operations into a single organization, SAP Americas, headed by Bill McDermott.

Last week at Sapphire, McDermott said that Brazil and Mexico were a particular focus for SAP going forward and that he hopes to bring some of the best business practices that have contributed to SAP’s U.S. sales success to the firm’s Latin American operations.

-China Martens, IDG News Service

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Copyright © 2006 IDG Communications, Inc.

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