Enterprise software maker SAP has released preliminary results for the first quarter of 2012, which ended March 31. The financial news was mixed. Although the company reported a record quarter in Asia Pacific/Japan and double-digit sales increases in markets such as Latin America and Germany, “sales execution issues” in North America resulted in slower sales growth Q1 2012 as compared to 4Q 2011. Software sales in the first quarter were $838.3 million, a 4 percent increase from the same period last year, but significantly less than the 22 percent rate of growth for 2011.
Despite some disappointing numbers, SAP is positive about their ability to perform going forward. The company has made a number of changes to correct the issues in North America. The software maker restructured its North American sales teams by industry groups instead of by geography. In addition, Robert Courteau, SAP’s North American president, voluntarily left the position after only a little more than a year in the role. SAP expects a 15 to 20 percent increase in software revenue in the second quarter due to its strong sales pipeline and increased focus on trends such as big data, mobile and cloud computing.
Demand for SAP’s new real-time, in memory data platform, HANA, is also likely contribute to the company’s performance for the remainder of the year. SAP plans to spend over $500 million to entice customers to the platform. Co-CEO, Bill McDermott also noted that some of the deals SAP was unable to complete in the first quarter were now underway. McDermott might have been referring to acquisition of Syclo, a maker of mobile software for the enterprise or the new agreements with Adobe, Appcelerator and Sencha to provide developers with a mobile app development framework.
SAP also re-confirmed its full year forecast of a 10 – 20 percent increase in software revenue. SAPs positive outlook had a positive impact of the company’s stock price. A full detailed report of first quarter performance is expected on April 25.