No sappy prospects
Grzegorz Kozłowski calls himself a quiet optimist.
In the midst of the worst IT market in history, the president of SAP Polska has seen the growth of the software manufacturer's business here slow to 15% annually from its previous high of 120% in 2000.
But last year the local operations of the German company saw the first ray of recovery from the IT spending malaise when it signed four contracts in the second half of 2002 with consumer firms, which had previously declined to buy its enterprise resource planning (ERP) software - business applications for running every aspect of a company.
"We are a little optimistic because of this," Kozłowski said. "If there is some positive sign in the economy, it is this consumer market. You can expect to see a wake up within the next six to nine months, and you can expect some positive signs within the investment market as well."
When SAP first opened shop in the country in 1995, it focused solely on the industrial and manufacturing sector, which included consumer goods producers and retailers, since there had been "such a big demand from this sector particularly, and we weren't able to concentrate on any other sectors," Kozłowski said.
Since 2000, the firm has added three other sectors to penetrate the market more deeply: financial services, public services and general services (including telecoms, media companies and utilities). Kozłowski expects the services sector to bring the most revenue growth during the next few years, fuelled by energy distributors and SAP's five major telecom clients.
But there is another new target group. SAP is now focusing on small and medium-sized businesses (SMB) since big IT companies which have been the traditional purchasers of its software have reduced their spending in recent years.
Since last year, SAP has signed 62 contracts with SMBs with 10-50 employees for its SAP Business One, ERP on a smaller scale with customer relationship management applications included. Kozłowski says that the company has an advantage in this area since small domestic software manufacturers, which previously had cornered the market, have fallen short by only providing financial and accounting solutions to their clients. SAP Business One, he said, covers all business processes for an average price of about €50,000 for most companies.
Yet, SAP's SMB strategy has drawn criticism.
"We won't see a possibility for a global software vendor to go for small companies because you cannot get purely affordable (systems) for small companies," said Paweł Piwowar, president of Oracle Polska, SAP's biggest competitor here. He added that other multinationals have failed to capture this market, and for this reason Oracle targets only medium-sized firms with 100 or more workers.
Nevertheless, Kozłowski believes SAP will come out on top of the market, with SMBs generating about 30% of the firm's total revenue during the next three years.
In the midst of the worst IT market in history, the president of SAP Polska has seen the growth of the software manufacturer's business here slow to 15% annually from its previous high of 120% in 2000.
But last year the local operations of the German company saw the first ray of recovery from the IT spending malaise when it signed four contracts in the second half of 2002 with consumer firms, which had previously declined to buy its enterprise resource planning (ERP) software - business applications for running every aspect of a company.
"We are a little optimistic because of this," Kozłowski said. "If there is some positive sign in the economy, it is this consumer market. You can expect to see a wake up within the next six to nine months, and you can expect some positive signs within the investment market as well."
When SAP first opened shop in the country in 1995, it focused solely on the industrial and manufacturing sector, which included consumer goods producers and retailers, since there had been "such a big demand from this sector particularly, and we weren't able to concentrate on any other sectors," Kozłowski said.
Since 2000, the firm has added three other sectors to penetrate the market more deeply: financial services, public services and general services (including telecoms, media companies and utilities). Kozłowski expects the services sector to bring the most revenue growth during the next few years, fuelled by energy distributors and SAP's five major telecom clients.
But there is another new target group. SAP is now focusing on small and medium-sized businesses (SMB) since big IT companies which have been the traditional purchasers of its software have reduced their spending in recent years.
Since last year, SAP has signed 62 contracts with SMBs with 10-50 employees for its SAP Business One, ERP on a smaller scale with customer relationship management applications included. Kozłowski says that the company has an advantage in this area since small domestic software manufacturers, which previously had cornered the market, have fallen short by only providing financial and accounting solutions to their clients. SAP Business One, he said, covers all business processes for an average price of about €50,000 for most companies.
Yet, SAP's SMB strategy has drawn criticism.
"We won't see a possibility for a global software vendor to go for small companies because you cannot get purely affordable (systems) for small companies," said Paweł Piwowar, president of Oracle Polska, SAP's biggest competitor here. He added that other multinationals have failed to capture this market, and for this reason Oracle targets only medium-sized firms with 100 or more workers.
Nevertheless, Kozłowski believes SAP will come out on top of the market, with SMBs generating about 30% of the firm's total revenue during the next three years.
