SAP May Need More Data Centers

SAP, the giant German company known for its ERP software, has been preparing a new software-as-a-service (SaaS) offering, which will likely be available sometime next year. Nicholas Carr notes that the new product, known as A1S, will have infrastructure implications:

The shift toward providing software over the Net poses some big challenges for the German giant. First, it’s going to have to get into the data center business – and that will mean substantial new capital investments. As Business Week reports: “The investment will shave its expected 2007 operating margin by 1% to 2%, to around 27% of sales. That’s slightly lower than in 2006. ‘You have a lot of costs up front,’ says (SAP CEO Henning) Kagermann. ‘It’s a different model.'”

Read more of Nick’s thoughts at Rough Type and broader coverage at Google News.

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About the Author

Rich Miller is the founder and editor at large of Data Center Knowledge, and has been reporting on the data center sector since 2000. He has tracked the growing impact of high-density computing on the power and cooling of data centers, and the resulting push for improved energy efficiency in these facilities.