SAP warns of slowdown

In spite of surging sales growth in 1997, particularly in the UK, German enterprise software company SAP warned that the business applications industry may experience a slowdown in 1998.

SAP’s preliminary results showed worldwide sales jump by 62% to DM 6.02bn (#2.03bn) in 1997, driven by the continuing success of R/3 application software and demand for software to fix the year 2000 problem. Net profit rose 63% to DM 924m (#173m).

SAP UK experienced a 110% revenue growth in 1997, amounting to #123.2m, with sales of SAP licences rocketing 130% and no signs of a slowdown.

However, SAP expects a slowdown in 1998, estimating sales growth of 30-35%. Hasso Plattner, SAP’s co-chairman, warned that this cautious outlook follows concern that demand generated by the year 2000 problem may slow in the second half of 1998, the unofficial deadline for fixing it. He also said SAP was monitoring the Asian economic crisis.

Related reading