German Software House SAP to Invest $200 Mln in R&D Center

The company will take on 200 engineers over five years, at a center to be set up in the Herzliya industrial zone.

SAP is to invest $200 million in setting up an R&D and training center in Israel, senior company executive Peter Zenka said today at a meeting with President Ezer Weizmann. SAP’s Israel operations manager Gabi Sebag told "Globes" the investment would be spread over the next five years, and that the company would not demand any support or subsidy from the Israeli government in exchange.

SAP of Germany is the world’s fourth largest software house, and the leading ERP software developer. Zenka said software house Ofek-Tech, in which SAP bought control a month ago, would set up and manage the company’s Israel R&D center.

Ofek-Tech developed a program for managing distribution centers which was integrated into SAP’s main product, R/3, which includes various organisation management applications. Ofek-Tech founder Shlomo Hasdai said the program was a unique component which up to now had not existed at SAP or at its competitors.

Following its entry into Ofek-Tech, SAP decided to establish a research and development center in Israel, with the aim of continuing to develop the distribution center software, and also of developing additional components for SAP’s ERP system. SAP’s Israeli center will be set up in the Herzliya industrial zone, next to the Motorola building, on an area of 1,000 sq. m.

SAP’s sales turnover totalled 6 billion deutschemarks in 1997, representing 62% growth on the previous year. The company was founded in 1972,and its value is estimated at 55 billion marks.

SAP’s main competitor, Baan of Holland, is also expanding its activity in Israel. At the beginning of the month, it announced it would invest in Israeli software companies that would develop products for its ERP environment. This is in addition to its previous investments in Israel, which total some $50 million.

Published by Israel's Business Arena on July 8, 1998

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