00:40 AM

IBM Software Group Chief Says SAP Problems Aren't A Problem

Did you know that IBM is the world's second largest software company?

It's been about 6 years since I spoke with Steve Mills, head of IBM's Software Group - the most profitable business at IBM.

Mr Mills was in town Monday evening to meet with a handful of media and chat about IBM's green initiatives around municipal infrastructure.

I had a chance to go off topic and ask him about SAP and the changes at the world's largest business software company.
[Please see: SAP Replaces CEO With 2 Co-CEOs - SVW]

Mr Mills said that he welcomed the changes and that it would not impact IBM's SAP related business.

SAP business is a big business at IBM. The company makes money on consulting services and hardware related to SAP implementations. For every dollar that SAP receives in license revenues, IBM and other systems integrators, make about $9 in services and other revenues.

SAP has tried to tap into the revenues that systems integrators make on its installations. But the economic slump has slowed new licenses and maintenance revenues. In the most recent financial quarter profits fell 12% and revenues were 9% below year ago results.