SAP Looks for Acquisitions in China to Pick Up Software Talent

SAP AG (SAP), the largest maker of business-management software, is seeking acquisitions in China to tap into the nation’s growing pool of programmers, Co-Chief Executive Officer Jim Hagemann Snabe said in an interview.

“We are investing in China not just in terms of sales capacity, but innovation in China for China and the rest of the world,” Snabe told Bloomberg Television in Beijing. “We are also looking here for possible targets of acquisitions.”

The Asia-Pacific region is growing in importance for SAP, accounting for 16 percent of sales in 2012, with the contribution rising every year since at least 2004, according to data compiled by Bloomberg. The region has been the fastest growing for Walldorf, Germany-based SAP, and will continue to be the case for “many years,” Snabe said.

SAP unveiled plans late 2011 to invest invest $2 billion in China by 2015. The company said at the time it would hire 2,000 people. That plan is on schedule as SAP has added about 1,000 people in China in the past 15 months, bringing the workforce to around 4,000, Snabe said.

The software maker is looking to buy “innovative companies,” Snabe said, without elaborating.

SAP in April reported a slowdown in Chinese purchasing patterns as the nation’s economic growth eased during the first quarter and a change in government delayed contract awards. Sales in the Asia-Pacific region would be “back on track” in the current period, co-CEO Bill McDermott said at that time.

Photographer: Ralph Orlowski/Bloomberg

Jim Hagemann Snabe, co-chief executive officer of SAP AG, said the software maker is looking to buy “innovative companies,” without elaborating. Close

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Photographer: Ralph Orlowski/Bloomberg

Jim Hagemann Snabe, co-chief executive officer of SAP AG, said the software maker is looking to buy “innovative companies,” without elaborating.

Order Pipeline

“I look at the pipeline in Asia Pacific and I feel very very good,” Snabe said in the June 7 interview. “The market is really picking up. We have lots of opportunities.”

SAP said last month it plans to offer even its largest programs through the Web, reducing the time and cost for deployment compared with software installed on customers’ machines.

The company is also investing in its Hana database software, which aims at the core market of SAP’s archrival Oracle Corp. (ORCL) Applications of the software, which reduces the time needed to analyze data and carry out transactions, can range from predicting track conditions for Formula One racing teams to planning cancer treatments.

SAP shares rose 1.5 percent to 58.02 euros in Frankfurt trading June 7. The stock has gained 28 percent in the past 12 months. Twenty-five of the 43 analysts tracked by Bloomberg recommend buying the stock, and three suggest selling.

To contact Bloomberg News staff for this story: Edmond Lococo in Beijing at elococo@bloomberg.net; Christine Hah in Beijing at chah@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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