SAP's US enigma

I deal with a number of multi-national clients where the HQ is somewhere a few thousand miles away and it is always interesting to hear perspectives from the "other side". Every Sapphire, you get to hear that from the 747 full of SAP folks who come over - about its US market.

To start with the US is SAP's largest market - no one complains about that - except when the dollar is weak, of course.

But SAP's market share in the non-manufacturing verticals (like banks and utilities) continues to be much smaller than in Europe. SAP's customer base upgrade to ECC 6.0 is going much slower than in Europe. SAP TCO in the US tends to be much higher because its SI partners tend to sell a lot more "change management" and other soft services - at least in German speaking Europe, the outside help in typically much more tactical and product centric. The US middle market is very fragmented and very diverse - very different from the "mittelstand" co-CEO Leo Apotheker invoked in one of our conversations with him this week.

Bill McDermott, President and CEO of the Americas was recently added to the SAP AG board. I imagine there will be much more nuanced discussions about the US market and the state of the dollar in that boardroom for the next few years.