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SAP plays up new strategy at CeBit

The software maker talks up plans to expand its sales to midsize businesses and its alliance with Hewlett-Packard and Vodafone to promote its applications on mobile devices.

Software maker SAP unveiled on Wednesday a plan to expand its sales to midsize businesses, as well as an alliance with Hewlett-Packard and Vodafone to promote its applications on mobile devices.

Henning Kagermann, SAP co-chairman, and Michael Kleinemeier, director of SAP Germany, were set to make the announcements at a press conference during the CeBit technology conference in Hannover, Germany. The executives also planned to discuss SAP's strategy amid a waning market for business software and tough business conditions in Europe, according SAP spokesman Bill Wohl.

In an effort to target companies with annual revenue of $1 billion or less, German-based SAP plans to introduce a new set of software tools and services for resellers and software development partners in Europe. Building a reseller channel is critical to SAP's effort to sell its enterprise resource planning (ERP) systems to midsize companies, analysts said.

In a separate development, SAP plans to package a special version of its customer service and sales applications for mobile devices with HP laptops, handheld computers and servers, as well as with telecommunications services from Vodafone. The companies will initially market the bundled set of products and service to companies in Europe, the Middle East and Africa, SAP said.

The CeBit show, which began this week, is one of the largest computer shows in the world and is expected to draw 700,000 people and 8,000 exhibitors. Although the conference falls near the close of SAP's first quarter, which ends March 31, the company had no plans to update its financial guidance at CeBit, Wohl said.

Kagermann and Kleinemeier were also set to tout the long-term prospects of the market for ERP software, designed to help companies streamline their internal operations. SAP sees opportunities to grow its ERP business in China, Latin America and Eastern Europe, Wohl said.

Furthermore, he added, many companies that have already bought ERP systems are making new investments to upgrade and expand their projects. For instance, SAP expects many of its more than 19,000 customers to upgrade this year to a new version it released in January called R/3 Enterprise and has already shipped 1,500 copies of the program. SAP is also pushing customers to buy a new product called mySAP ERP, which the company launched to coincide with CeBit. MySAP ERP incorporates components designed to make SAP's set of accounting, human resources, manufacturing and order-tracking systems easier to customize and more compatible with other business systems, the company said.

SAP is phasing out support at the end of the year for four older versions of the software that nearly half its customers use. SAP provides the new versions for free, however, to customers that pay their maintenance fees.