SAP Shifts Major Programs to Web to Win Buyers With Price, Ease

SAP AG (SAP), the biggest maker of business- management software, plans to offer even its largest programs via the Web in an effort to lure customers with easier deployment and lower installation costs.

SAP will offer to manage applications such as its mainstay enterprise-resource planning, customer-relationship management and analytics software in the cloud, Vishal Sikka, executive board member in charge of technology and innovation, said on a conference call today.

“We believe this will change the way that enterprises do their computing,” Sikka said in Palo Alto, California, ahead of the presentation of the Hana Enterprise Cloud product, based on SAP’s fast Hana database. “Everything can be executed in less than a second, no matter where it runs.”

SAP, whose sales have grown faster than Oracle Corp. (ORCL)’s in recent quarters, is trying to maintain momentum with revenue from new products including Web-based software and Hana. The two companies are the largest makers of enterprise-management applications and are releasing more of their software as online services as they compete with each other and cloud operators such as Salesforce.com Inc. (CRM) and Workday Inc. (WDAY)

SAP aims to lift sales to more than 20 billion euros ($26 billion) in 2015 from 16.2 billion euros last year.

By managing even the largest programs for clients at its centralized locations, Walldorf, Germany-based SAP will be able to lower the costs of running software, for instance by removing and adding computing power as needed, and by purchasing servers in large quantities, Sikka said.

The company is working with Intel Corp. to develop servers optimized to run the software in the cloud on a large scale.

Demand for Hana Enterprise Cloud has exceeded SAP’s expectations, with almost 60 customers currently working on an implementation compared with a target of 12, Sikka said.

To contact the reporter on this story: Cornelius Rahn in Berlin at crahn2@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.