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Thứ Bảy, 20 tháng 7, 2013

SAP sees recovery in Chinese firms' technology spending in second half - South China Morning Post

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German software maker SAP began a five-year, US$2 billion expansion programme on the mainland last year. Photo: Reuters

Despite the slowdown on the mainland, business software firm SAP predicts information-technology spending by state-owned enterprises (SOEs) and industry to pick up later this year, spurred by Beijing's economic "rebalancing" initiative.

"We're setting expectations pretty plainly," SAP Asia-Pacific and Japan president Steve Watts said.

"If the government is really serious about getting its 7 per cent or 7.5 per cent GDP growth [this year], they are going to have to spend and raise capital."

SAP, the world's third-biggest software company by revenue, reported late on Thursday that second-quarter software sales to customers in its Asia-Pacific and Japan operations declined 7 per cent because of lingering macroeconomic challenges across the region.

Jim Hagemann Snabe, the co-chief executive at SAP, said that weakness was a side effect of what was happening in the world's second-biggest economy.

"The slowdown in China is now also impacting the tech industry," he told reporters in Frankfurt on Thursday, according to a transcript of a conference call.

That slowdown affected spending by SOEs and resulted in mainland sales last quarter that were below the expectations of SAP, which counts more than 5,700 customers in the mainland market.

Watts said that information-technology spending by SOEs had slowed "in the past four to six quarters". The company, however, managed to double its mainland sales in the second quarter, compared with the previous quarter. It did not provide revenue figures.

SAP, which started doing business on the mainland in 1980, sells software that businesses and other organisations use to automate their operations. These include enterprise resource planning and human capital management systems.

"I am cautiously optimistic," Watts said. "We've just started to see projects being released again. We'll start to see some of that [SOE] spending happening in the third quarter, and we believe a lot more will happen in the fourth quarter."

Moody's Analytics said Beijing was expected to announce reform measures at the end of the year, which would help offset the slowdown in the economy.

SAP is currently in the middle of a five-year, US$2 billion expansion programme on the mainland. It started last year. Employee numbers have grown to about 4,000 from about 2,500 last year. It also has nearly 10,000 certified consultants.

Watts said the company was continuing to invest on the mainland. "This is critical," he said. "We absolutely believe that mainland China will be a top-three or top-five country market for SAP in the next few years."

He added that Walldorf, Germany-based SAP already had more than 120 partners in the mainland, such as computer maker Lenovo and telecommunications equipment supplier Huawei Technologies, to help it build its business.

SAP on Thursday announced that its global growth expectations for this year has been lowered to 10 per cent, from 11 per cent. Its total revenue in the second quarter rose 10 per cent year on year to €3.35 billion (HK$34 billion).

This article appeared in the South China Morning Post print edition as SAP sees recovery in mainland I.T. spending

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