INTERVIEW-SAP, Commerce One "cautiously optimistic" on U.S.
By James Mackenzie and Markus Wacket
BERLIN, Feb 20 (Reuters) - Europe's largest software company
SAP AG <SAPG_p.DE> and its U.S. partner Commerce One <CMRC.O>
said on Tuesday they were "cautiously optimistic" that sales in
2001 would resist a slowdown in U.S. economic growth.
SAP co-Chief Executive Hasso Plattner and Commerce One CEO
Mark Hoffman told Reuters in an interview that order pipelines
appeared to be holding up despite gathering signs of faltering
growth in the world's largest economy.
"We're really watching the pipeline and from what we see out
there, I would say we are cautiously optimistic on that side of
the equation," Hoffmann said.
"We're seeing that where IT spenders are cutting down on
their rate of growth, they're still growing their IT budgets and
they say they're going to spend money in three areas:
Marketplaces, Supply Chain Management and CRM (Customer
Relationship Management), two of which are good for me and three
that are good for Hasso."
SAP and Commerce One, which in June set up a partnership to
develop software to allow companies to buy and sell goods over
the Internet, currently run 15 Internet marketplaces, of which
10 are in Europe.
Plattner, whose company has battled to establish itself in
the fiercely competitive U.S. market, said the outlook for sales
remained strong even with the prospect of slower economic
growth.
"There is still a huge volume there," he said. "I believe
that more contracts will go to larger and well established
companies, companies that are profitable."
"I think our share of this market volume can be increased
and so far I don't think the slight downturn in growth rate will
hit us," he said.
SAP and Commerce One both announced better-than-expected
fourth quarter results last month and both have stood apart from
much of the battered tech sector, giving relatively positive
forecasts for the current year.
Other software companies, including industry giant Microsoft
Corp <MSFT.O>, have warned of flagging revenues as companies
slow purchases of some types of information technology and
computer hardware.
SAP last month announced a 51 percent rise in fourth quarter
operating profit on the back of a strong performance from its
mySAP.com e-business suite and said it expected sales to grow by
at least 23 percent in the first half of the year.
INTERNET GROWTH
The business-to-business (B2B) marketplace concept, once
expected to see mushrooming growth as companies joined forces to
cut purchasing costs on everything from pencils to car parts has
faced increasing scepticism, with many analysts suggesting that
just a few big marketplaces will survive.
But Plattner brushed off such concerns, saying companies
would find ways to work together online.
"One thing is for sure and that is in the future companies
will work together using the Internet," Plattner said.
He said SAP might seek further partnerships or acquisitions,
but he played down the prospects of a major deal.
"We do partnerships from time to time, we buy companies but
we don't go for big mergers," he said, adding that SAP would
continue to look for opportunities where they arise.
"It's more that the technology is interesting. The company
has to match and that's with regard to location, with regard to
the people, to their vision. That's not that easy."
But Plattner stressed that the relationship with Commerce
One was for the long term.
"We started with the premise that we wanted to work together
for the long term and not just for one or two seasons," he said.
((Frankfurt Newsroom +49 69 7565 1265,
james.mackenzie@reuters.com))
REUTERS
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