SAP chief, German headquarters an advantage in the midst of war US president

McDermott told Reuters that SAP, which makes financial management and human resources software for large businesses, is targeting large state-owned enterprises in China as clients despite the ongoing trade war between the United States and China.

Some of SAP’s US-based rivals, such as Microsoft Corp., have been banned from doing business with Chinese firms such as Huawei Technologies Co Ltd Other US firms such as Cisco Systems Inc. say Chinese states will not recognize well-known firms. allow them to bid on contracts due to trade tensions.

SAP, with a market capitalization of $ 131.3 billion, does not deliver its revenue from China. But the company faces trade war risks because if enough content of a software product comes from the United States, export restrictions could apply.

German business software company SAP SE has an edge over its US rivals because it faces fewer restrictions on doing business with China, Chief Executive Bill McDermott said in an interview.

SAP, with a market capitalization of $ 131.3 billion, does not deliver its revenue from China. But the company faces trade war risks because if enough content of a software product comes from the United States, export restrictions could apply.

He said that “If you have more than 25% of US-driven innovation in software, we respect the same rules as a US company,” and that “There are many solutions we have where this is not the case. We we have not radically changed our development process pending a dispute between China and the US, “he added.

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The hedge fund activist Elliot Management Corp. also acquired a stake in SAP earlier this year, which analysts believe has pressured the company to announce a stock buyback program on a day of capital markets in November.

McDermott told Reuters that progress could be uneven because it will take time for job cuts made this year to take effect.

He said “You get the biggest leverage when you get into year two and on.”

Following a number of acquisitions in recent years, SAP has switched to cost-cutting mode, implementing layoffs earlier this year and committing to a goal of increasing operating margins by 500 basis points over the next five years. .

McDermott said SAP has not yet determined how big – or even if – the share buyback will be announced, because company leaders are still gathering information to present to its supervisory board, which includes workers’ representatives and must approve major decisions.

He added that “We haven’t made a decision on quantity, or if it’s zero, or it’s something in a string, because we haven’t even introduced yet, we’re taking a very diligent look at it.”/Investing.com

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