Bloomberg News

Amazon Wins SAP as Cloud Partner for Handset Software

May 02, 2012

Sanjay Poonen, head of global solutions for SAP AG. Photographer: Jacob Kepler/Bloomberg

Sanjay Poonen, head of global solutions for SAP AG. Photographer: Jacob Kepler/Bloomberg

SAP AG (SAP), the largest maker of enterprise software, chose Amazon.com Inc. (AMZN:US) to host its Afaria mobile offering on the Internet, giving customers a cheaper way of managing employees’ smartphones and tablet computers.

Afaria, which lets administrators install applications on devices, test security and switch functions such as cameras on and off, will be hosted with Amazon Web Services, Sanjay Poonen, SAP’s head of global solutions, said in an interview. The deal may help Walldorf, Germany-based SAP boost its Afaria clients, which include pharmaceutical company Novo Nordisk A/S (NOVOB) and Taiwan’s national police agency, by 20-fold to 20,000, he said.

“Some of our competitors who wanted to do this on their own had problems scaling the software and got corrupted results,” Poonen said by telephone. “With Amazon, we don’t have to worry about that, and it’s amazing how the infrastructure scales up cheaply.” SAP said no contract has been signed.

Amazon’s Web-based offerings suffered outages last year that knocked out sites across the U.S., prompting some clients to question the dependability of so-called cloud services. Poonen, who a year ago said the crash showed companies in the industry needed to band together to improve technology standards, said today that Amazon Web Services is “really reliable.”

Amazon fell 0.1 percent to $230.25 at the New York close. SAP slipped 0.2 percent to 50.01 euros in Frankfurt.

Verizon, Vodafone

SAP, which aims to more than double revenue from mobile products this year from 110 million euros ($145 million) in 2011, also is cooperating with companies including Verizon Communications Inc. (VZ:US), Vodafone Group Plc (VOD) and Accenture Plc (ACN:US) to extend the reach of its handset-management software.

Researcher IDC predicts the market for mobile security will rise 35 percent annually to exceed $1.8 billion in 2015.

Getting clients to use device-management software helps to sell mobile applications, Poonen said.

“The next conversation is how to build or implement apps, just securing devices isn’t enough,” he said. “It’s a fantastic door opener.”

SAP is also seeking allies in the development of mobile applications. Last month, the company announced it will offer an open development platform with Adobe Systems Inc. (ADBE:US), Appcelerator Inc. and Sencha Inc. Research firm Gartner Inc. in a study last week ranked SAP’s strategy and execution top among all companies offering mobile platforms, ahead of peers including Apple Inc., International Business Machines Corp. and Google Inc.

Mobile Software

Under co-Chief Executive Officers Jim Hagemann Snabe and Bill McDermott, SAP acquired mobile-software and database company Sybase Inc. in 2010 for about $5.8 billion.

SAP is betting on revenue from mobile applications, on- demand software and the real-time processing platform Hana to lift revenue to more than 20 billion euros by 2015. The company reported 2011 sales of 14.2 billion euros.

The software maker, which on April 10 said it agreed to buy mobile-application maker Syclo LLC, may make further acquisitions in the mobile sector to cement its lead of about “two to three years,” Poonen said. It’s targeting companies whose technologies can fill gaps in SAP’s lineup, though no deal is imminent, he said.

“We are not a consolidator of technologies just for the sake of market share,” he said. “We’re going to look strategically -- what are the intelligent places where we can advance in order to stay two to three years ahead of the big guys? Then they have to follow our moves.”

To contact the reporter on this story: Cornelius Rahn in Frankfurt at crahn2@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net


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    (Amazon.com Inc)
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  • VZ
    (Verizon Communications Inc)
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