SAP, the world's leading maker of business software, said late last night that software licence sales rose by 11% to €3.1 billion in 2006, falling short of targets. The company has operations in Dublin and Galway.
Adjusted for exchange-rate effects, software licence revenues advanced by 13.5% last year, SAP said in a statement. The group had originally been expecting to achieve software revenue growth of 15-17% in 2006 after an increase in 18% in 2005, but had warned in October that growth could come at the lower end of that range.
SAP's overall sales last year, which on top of software sales also include revenues from consultancy, training and maintenance activities, grew by 11% to €6.6 billion.
Software licence sales are seen as the key benchmark for the sector because companies use them to generate revenue from maintenance and consulting.
In the fourth quarter alone, software sales rose by 7% to just under €1.3 billion, a long way short of analysts' expectations for growth of around 11%.
SAP, which generates close to 40% of its sales in the Americas, where it faces cut-throat competition from arch-rival Oracle, appears to have been hit by the strength of the euro against the dollar. In the US, licence sales rose by just 4%, but by 15% when adjusted for exchange rate fluctuations.
