SAP Speeds Finance Tools to Bolster Hana’s Appeal Against Oracle

SAP AG, the largest maker of business-management software, is speeding up its software to attract more customers to its Hana database, which competes against Oracle Corp. products.

SAP introduced what it calls “simplified” financial applications to help businesses view cash positions, make forecasts and plan for events such as bad weather or closed shipping routes using the most current data. SAP will initially target its Simple Finance software and Fiori user interface at large companies that want to use Hana to process more information in real time rather than overnight batches.

“We want everyone to run a simple, gorgeous user experience for SAP,” Chief Executive Officer Bill McDermott said today at the company’s Sapphire customer conference in Orlando, Florida. “We’ve moved from responding to the past to predicting the future.” He become sole CEO at the German company last month.

SAP supplies software running more than 250,000 businesses’ manufacturing, financial management and procurement systems, and is fending off competition from cloud-computing companies Inc. and Workday Inc., while fueling a historic rivalry with Oracle in human-resources tools and other areas. McDermott has been acquiring online software assets, shuffling management and cutting jobs.

Slowing Growth

SAP’s growth is slowing as many customers move functions handled by its applications to online tools from Salesforce and other suppliers. The company’s sales will rise 4 percent this year to 17.5 billion euros ($23.8 billion), according to the average estimate of analysts surveyed by Bloomberg.

SAP eventually stands to benefit as businesses move more key applications to cloud computing, though the transition will take time, said Rick Sherlund, an analyst at Nomura Securities.

“As we see more mission-critical workloads moving to the cloud, that plays to the strength of SAP,” said Sherlund, who recommends buying the company’s shares. “Customers will be slow to adopt,” he said. “They’re things you get fired for if they don’t work right.”

Cloud computing can displace servers and software that run inside companies’ data centers, and SAP will have to manage the transition to this model without its former technology head Vishal Sikka.

Workforce Changes

Sikka left the company abruptly last month for “personal reasons” after helping the company to develop and strike deals with hardware and software partners to sell Hana. McDermott named veteran Bernd Leukert, based at the company’s Walldorf, Germany, headquarters, to take over Sikka’s duties.

Leukert said software such as Simple Finance takes advantage of a platform the company is making available to developers for analyzing data, text, and geospatial information in their applications. Using this “Hana Cloud Platform,” developers at a reinsurance company, for example, could build a model of how thunderstorms will affect business without employing its own mathematicians, Leukert said.

To deliver more modern software, McDermott is remodeling SAP’s workforce. While SAP is cutting about 3 percent of its 67,000 staff, or about 2,000 jobs, it will end the year with a larger workforce as it hires people with cloud-computing skills, the company has said.

McDermott shared the top management post at SAP from 2010 with Jim Hagemann Snabe, who joined the supervisory board in May.

SAP has also been acquiring smaller software makers to bolster its product line. It agreed to buy SeeWhy, a Boston-based maker of marketing software, on May 20 and earlier last month completed its acquisition of Fieldglass Inc., a maker of online human-resources software.

Competitors have also been strengthening their hands. Salesforce and Microsoft Corp. announced a pact on May 29 that lets Salesforce’s customer management tools run on Windows mobile devices and better share information with Microsoft’s Office software.

SAP shares rose 0.3 percent to 55.98 euros at 4:29 p.m. in Frankfurt, paring the decline to 10 percent this year.

Before it's here, it's on the Bloomberg Terminal.