SAP restructure aims to revive company fortunes

SAP has confirmed it is to undergo a restructuring of its activities following poor first quarter results.

The ERP firm is to split into three divisions. One will concentrate on developing new products, a second will focus on developing existing products while the third group will be dedicated to fixing customers software problems.

The move has sparked speculation the company is priming itself for a take over by Oracle.

Jeffery Mann, analyst at Meta Group, said: "It's very unlikely Oracle will take them over; they are big enough to go it alone."

However, he did claim a reorganisation was long overdue. He said: "In a 90s marketplace, SAP is very slow to react and they need to change the way they appeal to the market."

Dale Vile, analyst at Bloor Research, said: "This is long overdue, but I'd not read anything into it other than the fact they have had a sprawling, disjointed company for some time. The company has scaled up but not shaken out.

Vile added: "There are 5,000 developers at SAP all working on projects from mainstream ones to small industry solutions and they are not getting products out the door as quickly as they could do."

He claimed the company was guilty of not listening to its customers. He said: "The company tried to become more customer orientated, stop being an engineering company with sales guys selling and actually listen to the customers. It sounds like a cliché but they had not been doing this until they had to do it. The mismatch between the objective of the engineers and the way the organisation is structured has a direct affect on output."