SAP Chiefs See Slowdown, Currency Headwinds
Top executives for SAP say they see a slowdown in the United States as well as an unfavorable currency market in the coming year.
SAP CEO Henning Kagermann told CNBC Europe that he did not expect an overall slowdown in IT spending this year, but acknowledged that business in North America is slowing.
"(In) North America, it's not a secret the market is tougher," Kagermann said. "Customers are more cautions and the deal size is lower than in past quarters."
"We have seen a mild slowdown in the U.S. compared to prior quarters but in constant currency we're up 20 percent year over year in software and related services mainly because 50 percent -- 5- 0 -- is net new orders and most of that replacing legacy sytems or Oracle related systems," added Bill McDermott, SAP CEO for North America, in a separate appearance on CNBC in the United States.
The executives made their comments following the release of company results that were shy of expectations and detailed an upcoming delay in a key software offering.
In addition, the weak dollar is affecting company results as well.
"What you see mostly is the effect of the strong euro," said McDermott. "... SAP is a truly global software company. This quarter represent the 22nd consecutive quarter of double digit growth in the United States and the 17th worldwide. But the euro is so strong that it really does give us some headwind that's very difficult since the U.S., for example, has become our largest market."