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SAP results lower than expected

Warwick Ashford

SAP's first quarter financial results released yesterday confirm that large software suppliers are not immune from the effects of the economic downturn.

Although total revenue was only 3% down from the same period last year at €2,397m, software revenues fell 33% from €622m in Q1 2008 to €418m.

Net income of €204m was also down from €242m a year ago, but SAP managed to keep software and software-related service revenue almost unchanged at €1,740m.

The results were below forecasts of profits of €261m on revenue of €2,550m, but analysts said SAP's first-quarter results a year ago were boosted by the acquisition of Business Objects.

"While visibility for software revenues remains limited, we continue to take the necessary steps to protect our margin in this tough operating environment," said Léo Apotheker, co-CEO of SAP.

In a separate announcement, SAP said it had agreed to provide benchmarking and key performance indicators (KPIs) for its maintenance programme.

The agreement was reached after months of negotiation between SAP and the SAP User Group Executive Network (Sugen), a global federation of 12 user groups.

The move has been welcomed by the SAP UK & Ireland User Group, which said decision reflects the influence of user groups.

Negotiations between SAP and Sugen began late last year after a strong reaction to SAP's mid-year announcement that all customers would be transferred to a more expensive support programme.


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