SAP cornering $11 billion market for green software

SAP is cornering $11 bn mkt for products that help cos increase productivity while limiting the effect on environment.

By Bloomberg | Updated: May 18, 2011, 10.28 AM IST

ORLANDO, FLORIDA: SAP, the world’s largest maker of business management software, is cornering a € 7.5-billion ($11 billion) market for products that help companies increase productivity while limiting the effect on the environment. At its annual Sapphire conference this week in Orlando , Florida, SAP is showing how software that lets businesses monitor and manage such things as their carbon footprints and the number of employee sick-days can couple with new mobile and data-analysis products to boost efficiency .

SAP’s sustainability software , used by about 1,700 customers, was one of the company’s fastest growing segments last year, said Daniel Schmid, vice-president of sustainability operations . Large enterprises worldwide will spend as much as $12 billion on software and hardware related to sustainability this year alone, according to researcher Gartner. SAP is a good distance ahead of the field, said Stephen Stokes, managing vice-president at Gartner.

To compete with IBM, which incorporates both software and hardware solutions in its Smarter Planet offer, SAP will need to find business partners, he said. Among customers that purchased SAP’s sustainability software are Baker Hughes (BHI), the oilfield services provider, Deere & Co, the largest maker of farm equipment, and De Beers, the world’s biggest diamond-producer , according to the Walldorf, Germany-based software company.

It’s a sizeable business for us, Peter Graf, SAP’s chief sustainability officer, said in Orlando. We’ve just started, this is a young discipline. Sustainability software generated a three-digit million euros amount in revenue for SAP last year, Schmid said. In a joint study with McKinsey & Co on the market , SAP predicted that the addressable market for SAP’s solutions would be worth as much as a total of € 7.5 billion between 2009 and 2014.

Adrian Bowles, vice-president and principal analyst at Constellation Research, recently analyzed software offerings for energy and carbon management and named companies like Hara Software and C3, founded by Thomas Siebel. Hewlett-Packard has struck partnership deals with both. We have deep pockets to invest, Graf said, citing SAP s acquisitions of Clear Standards, a carbon-management software company and Technidata, which makes software helping companies comply with environmental , health and safety regulations.

Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.