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  SAP and Microsoft fight for place at bottom



March 17, 2004

 HANNOVER, Germany SAP, the most successful software company in Europe, is throwing down the gauntlet to the world's software leader, Microsoft, by chasing after smaller and smaller businesses as customers, just as Microsoft is throwing its weight into the same arena.

This week, as the annual Cebit technology trade show opens here, SAP plans to shine a light on its strategy for small and medium-size businesses. With the business-software marketplace under U.S. Justice Department scrutiny because of the takeover battle between the second- and third-largest players - Oracle and PeopleSoft - SAP of Germany wants to change the definition of its market.

SAP and Microsoft command exceptional positions in their traditional markets, industry analysts say. But the fickle and transient market of small and medium-size businesses is relatively new to both companies.

Founded 32 years ago by five former executives of International Business Machines, SAP is a dwarf next to Microsoft by many measures - size, revenue, profit, number of customers. But it dominates its field: business software for large, multinational companies to streamline manufacturing, accounting, sales, human resources and other corporate tasks.

"They have a huge installed base and unbelievable brand-name recognition with the world's largest enterprises - everyone knows who they are," said Bruce Richardson, a software analyst at AMR Research, a Boston-based technology consultancy.

On the other hand, most small businesses have never heard of SAP, and those that have are often turned off by SAP's reputation for making expensive, complex software, analysts say.

As dense and dry as SAP's main products are - its name is short for Systems.

Source: International Herald Tribune




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