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SAP tosses out stock-linked sweeteners to staff

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Bridging the IT gap between rising business demands and ageing tools

CeBIT SAP employees will continue to bag cash incentives in the form of phantom stocks as the enterprise computing behemoth works harder to hang onto valuable talent.

“I do believe it makes a lot of sense to have incentive programmes for the employees as well, which make them interested in the share price of the company and give them an opportunity to participate in our success,” co-CEO Jim Hagemann Snabe told Businessweek at CeBIT. “This is an industry with a war for talent, and talent is the biggest differentiator for everyone in our industry.”

Phantom stocks are cash bonuses that mirror the movements of actual company shares, and then pay out within a certain timeframe – so if the firm is doing well (according to the markets anyway), staff get a good bonus.

SAP wants to keep a firm hold on its talent as it moves more into cloud-based offerings for its mainstay enterprise resource planning (ERP) and customer relations manager (CRM) software.

Old guard enterprise software companies like SAP and its major rival Oracle are having to move fast into the cloud as companies ditch long-term licences in favour of the flexibility and mobility of fluffy offerings.

Co-CEOs Snabe and Lars Dalgaard announced at CeBit yesterday that the firm is planning to provide its Business One application – which combines several pieces of enterprise management software into one – as an on-demand cloud service.

The move should make SAP more accessible for small and mid-size firms that wouldn't be prepared to invest in any of the company's big ticket, long-term software.

"Small companies with little infrastructure and outsourced IT are expecting cloud offerings, sometimes in easy combination with their existing software," Eric Duffaut, president of ecosystem and channels at SAP, said in a canned statement.

"Together with our partners, SAP is committed to providing customers of all sizes with choice and a solution that fits their needs. Now, small companies can use SAP Business One on-premise or in the cloud to run their businesses better."

Snabe told Businessweek that SAP's cloud business would "certainly" break even before reaching a 2015 sales target of €2bn. ®

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