No 'R' in SAP

Seems like everywhere you turn nowadays there's talk about the U.S. slipping into an economic recession, dragging the world economy down with it and forcing a global belt-tightening across all industries. No doubt the sub-prime mortgage meltdown will reverberate throughout the economy for some time, and its impact will continue to be felt, particularly in the financial services sector. But all is not gloom and doom, and if the 'R' word should rear its ugly head, tech companies focused on delivering genuine value to their customers will plug on.

Take SAP for instance. A technology industry stalwart, SAP's solid performance in 2007 and strong outlook for 2008 is an impressive exhibition of strength and stability against an increasingly volatile and unclear (if not downright bleak) economic outlook.

SAP's solid performance in 2007

SAP recorded a solid financial performance in 2007, exceeding the company's revenue projections for the year and racking up impressive gains in nearly all financial reporting categories. For Q4, software sales increased 13 percent to $5.07 billion. Software and software-related services revenues for the full year increased another 13 percent to $11.05 billion. Total revenues for 2007 increased 9 percent to $15.24 billion, and the company's net profit rose to $2.86 billion dollars in 2007, an increase of 3 percent over 2006.

These numbers were generated at a time when SAP also made sizable investments - including its $183.7 million spend on the company's new hosted mid-market offering, Business By Design, and the hefty $7.1 billion price tag for Business Objects. By all measures, 2007 was a good year for SAP and, by extension, for the growing SAP ecosystem. The company is faring well given today's difficult economic climate, and its performance in 2007 should help ease concerns that a slowing U.S. economy may hamper spending on business software and related services.

SAP's upbeat outlook for 2008

More impressive than SAP's solid 2007 fiscal performance is the company's unabashedly positive guidance for 2008. In a recent interview, SAP Chief Executive Officer Henning Kagermann directly states that he doesn't expect a slowing global economy to hurt SAP sales. Said Kagermann, "There is today no indication that a changing economic environment, which is still speculative, would impact the demand for enterprise software [.] Most of the exposure to [SAP] is pretty low. Companies have to stay competitive and software like ours helps them do that."