German giant takes advantage of rival Oracle's merger to win over SME customers SAP, the world's largest business applications supplier, will sharpen its focus on acquiring small and medium-sized enterprise (SME) customers in Hong Kong this year as main rival Oracle gets sidetracked by its merger with PeopleSoft. Lee Boon Lee, the newly appointed North Asia chief operating officer and president of the German software firm's Hong Kong and Taiwan operations, said SAP was looking 'to double its SME business this year, after growing fourfold last year'. He declined to supply specific SME figures in Hong Kong but said that more than 60 per cent of SAP's new customers from the Asia-Pacific came from this market segment. SAP, which has more than 6,000 corporate clients worldwide, signed up over 1,000 new customers in the region last year. The company's Asia-Pacific operations posted 20 per cent year-on-year growth to Euro480 million ($4.95 billion) last year, with software sales up 28 per cent year on year to Euro175 million during the same period. 'We also extended our regional market share based on software revenue to about 67 per cent last year,' Mr Lee said. 'We supported this growth by hiring more than 1,140 new employees in the region.' He attributed the growth partly to 'the disruption' caused in the market by Oracle's hostile takeover bid for rival PeopleSoft. Oracle capped a difficult, 18-month courtship of PeopleSoft in December by forging a US$10.3 billion merger, which made the combined company the world's second largest business applications vendor after market leader SAP. The pre-merger Oracle and PeopleSoft competed against SAP in the lucrative global market for business-automation software, comprising enterprise resource planning (ERP) and related applications used by organisations to manage supply chain, customer relationship, product life cycle and supplier relationship. Mark Gibbs, vice-president for applications at Oracle Asia-Pacific, has said the company remains well-positioned to grow its business in the region, where more than 2,000 enterprises use its applications. Research firm Gartner said database kingpin Oracle showed strong market share and local application support in China and South Korea. It also expected Oracle to push for 'a relatively speedy consolidation of duplicated resources' with PeopleSoft in the region, particularly office space and staff in general operations, administration and sales. But Mr Lee said that 'another 18 months' of work to integrate PeopleSoft would enable SAP to scoop up more business in the region as questions about customer support clouded the new Oracle's efforts to expedite the merger process. Forrester Research predicted 'a temporary competitive vacuum' after Oracle's acquisition of PeopleSoft. The technology research firm said SAP, Microsoft's business solutions unit and 'other ERP and best-of-breed vendors will see increased opportunities to win deals and reposition their offerings'. Mr Lee said stability and long-term commitment were key factors for organisations looking for a software supplier. 'That is especially critical for small companies working to grow their businesses,' Mr Lee said. 'SAP understands this because the company also started out small, more than 20 years ago, with only five employees in Germany.'