SAP strikes out for medium sized business market

Internal reorganisation will add greater focus to niche players in specific vertical markets.

SAP has outlined a reorganisation that calls for a matrix of new units and development teams, as well as the spin-off of its systems-integration unit.

The company wants to reach more medium-sized companies in the Middle East and around the world that need enterprise resource planning software tailored to their industry-specific needs.

Seven new units have been created: Financials; Supply-chain management; Customer-relationship management; Human resources; Product life-cycle management; Business intelligence; and the Workplace

Three development teams will be assigned to each business unit. The Installed Base Development team will maintain and integrate aspects of and provide consulting services to customers about projects.

The New Application Development team will build new products, and the Product Management team will handle product planning and marketing.

Industry-focus Groups

SAP will also have seven industry-focused groups to address the needs of midsize companies in: Consumer products and retail; Discrete industries, such as auto, aerospace, and defense; Financial services; Higher education and health care; Media, telecommunications, and utilities; Oil and gas; Chemicals and pharmaceuticals

"To penetrate the midmarket, SAP needs applications that are tailored for their needs," Meta Group analyst Doug Lynn says.

But customers will be watching to see how well SAP establishes expertise in each of its vertical units before making any buy decisions, Lynn says.

Spinning off the integration business is a smart move, he says, and should provide one fewer distractions for the dithering company.

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