SAP May Need More Data Centers

SAP's move into the SaaS market will likely mean additional data center infrastrucutre for the giant German software company.

Rich Miller

April 25, 2007

1 Min Read
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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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