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SAP acquisitions helped expand retail presence

SAP and Oracle have been at each other's throats in the retail industry and both vendors have been acquiring firms to build out specific retail functionality and broaden their footprints in the market. Jim McMurray, SAP's senior vice president for retail, is on the front line of that battle. In an interview with, McMurray wouldn't rule out further acquisitions, but he said certain areas will always be addressed by point solutions, rather than prepackaged software.

There are white-space areas that we are investigating and customers are asking us to be more active in.
Jim McMurray,
senior vice president for retailSAP

Why is retail identified as a big growth area for SAP?
It's important for a couple of different reasons. The market as a whole is largely untapped from a packaged application perspective. If you look at the retail landscape as a whole, 60% of retailers are using internally developed applications. As a result of that, both SAP and Oracle are aware of this market statistic, and we're looking to grow into that space nicely. When you combine the relative under-penetration of packaged applications with the overall market potential, the opportunities are clear. Manhattan, Lawson, CRS Retail, GERS and Retalix have aggressively expanded their own footprints through acquisitions. What's the value-add for going with a large ERP vendor over some of these niche vendors?
If you want to be in the business of integrating applications, then go with our competitors. If you want to optimize your opportunities as a retailer and have happy, satisfied, productive employees and really reliable customers, then you want to buy SAP. It's two totally different strategies. Companies like Beall's understand that retaining and attracting customers is a priority. Doesn't it make sense for a retailer to choose a point solution based on its specific areas or needs?
I don't think there will be a day when a retailer will come to a single vendor for all their situations. There's always going to be small niche vendors out there to provide the smaller applications that retailers need. You can have a very nice core infrastructure of SAP applications and choose a point solution such as planogram visual merchandizing application or cashier productivity tool -- areas where there's not enough enterprise requirement for SAP to invest in that space. Why has SAP taken an acquisition approach in Retail, much like Oracle, as opposed to the rest of its product offerings?
We've had two acquisitions, and they were both tuck-in acquisitions. From an industry perspective, we've been active with acquisitions, but from a company [perspective], it isn't a lot of acquisitions. There are white-space areas that we are investigating and customers are asking us to be more active in. One example is the area around planogramming or visual merchandising, but I'm not making a comment that we're … actively looking to make an acquisition. A second area is the area of perishables, and this is where we're actively looking to complete our portfolio. Is SAP on track in integrating the Triversity and Khimetrics acquisitions?
We'll be shipping an integrated version of the Triversity applications and SAP in December. It will be a complete integration between all Triversity and SAP applications. We will also have four or five customers live with that integrated suite. If you are a Triversity customer, you can stick with what you have. If you're a Triversity-SAP customer, then you have the ability to leverage prepackaged integration. Integration between Khimetrics and SAP is complete and available. What is the state of adoption of SAP Master Data Management among retailers?
We have north of 10 retailers in the U.S. that are also Master Data Management customers. Most retailers are looking for a way to understand the needs of the customer across all the channels that they sell. Chico's, which has not currently deployed this functionality, has three brands, and it would be interesting for them to tap into the data to know about the customer who shops among those various brands. The Home Depot is also very interested in understanding as much as they can about overall purchasing habits of their customers, and a product like MDM allows that to happen.

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