by CIO Staff

SAP to Boost Investments in Midmarket

Jan 24, 20072 mins

SAP reported slower growth in revenue for its fourth fiscal quarter and said it would significantly boost investments in products for midmarket companies.

The enterprise software vendor reported total revenue for the three-month period ending Dec. 31 of 3 billion euros (US$3.9 billion), up 7 percent from the same quarter a year before. Net income was 799 million euros (US$1.04 billion), an increase of 29 percent from the previous year, SAP said.

SAP had warned earlier this month that growth would be lower than it had originally expected, due to a slowdown in sales in the Americas and in the Asia Pacific region.

The company announced it will invest an additional 300 million to 400 million euros over the next two years to grow its business among midmarket companies, where it sees untapped opportunities.

The investments will lead SAP to generate lower operating margins for the first time, to between 26 percent and 27 percent for 2007, down from 27.3 percent in 2006.

The company predicted 2007 revenue growth from software and related services would climb 12 percent to 14 percent from the year before, compared to growth in 2006 of 12 percent.

-James Niccolai, IDG News Service (Paris Bureau)

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