SAP public division on the move

• By Dibya Sarkar
• Jul 03, 2002

SAP AG's global public services division will move its headquarters from

Germany to Washington, D.C., the company announced June 26 at the E-Gov

2002 conference.

The group's relocation to the United States signals a greater commitment

by the company to the growing strength of e-government at the local, state

and federal levels, said Tom Shirk, president of SAP Public Services Inc.

Shirk was also selected to lead the company's global public-sector development

group. It will be his job, he said, to speed the development of products,

including product strategy and market analysis, to the global marketplace.

The public services division, which also includes health care and education,

accounts for about 43 percent of the company's market share globally, he

said, adding that the company also sees it as one of two global growth areas,

the other being the financial sector.

"We really see e-government as now. The momentum is picking up," Shirk

said. "We see more and more major cities going live with these services.

The political implications of not providing those services are going to

be a factor."

The 30-year-old company has been in the public-sector arena for about

a decade with a strong presence at the municipal, state and federal levels,

especially in the Defense Department.

Jocelyn Young, public-sector and health care research program manager

at IDC, said the announcements send a "strong message" that SAP is committed

to the growing government IT market.

"It's in line with SAP's increased focus on providing vertical industries-specific

solutions," she said. "They've been a leader in manufacturing. I think they're

definitely very concentrated on developing a lot more diverse set of vertical

industries-specific solutions. I think it's obviously one of their top priorities."

Many IT vendors are eyeing the market with "envy," she said, but for

them to successfully participate, there's a "learning curve." They also

need time to build relationships.

"But I think [SAP] having a U.S.-based person here is going to strengthen

that even more," she added. "I think it's also in line with SAP's overall

movement over the past few years to really position themselves as a more

international company that can do business successfully in the U.S., not

just Germany."