Deutsche Telekom Picks A Fight With SAP By Launching Small-Business Cloud Applications

sap america

Photo: Glassdoor

Deutsche Telekom AG, Europe’s second-largest phone company, plans to offer cloud-based applications for small and medium-sized companies, in a move that brings the company into competition with SAP AG.The operator will start the Business Marketplace platform with applications that let clients run software such as customer-relationship management and accounting over the Web, Chief Executive Officer Rene Obermann told reporters at the CeBit technology fair in Hanover, Germany today.

“The potential among smaller companies is enormous,” Obermann said. “We have to make sure we get a large-enough share of that.”

The potential market is 10.7 billion euros ($14.1 billion) for Germany, where only 12 per cent of smaller businesses use cloud functions, Obermann said. The Bonn-based company currently has cloud-computing sales of about 500 million euros, of which about 140 million euros comes from small and medium-sized enterprises, he said. The CEO plans to boost services such as telemedicine, online marketplaces and downloads of music and games to combat a fall in sales from traditional phone services.

The software will target clients that don’t need the complexity that SAP systems offer, said Dirk Backofen, head of marketing for Deutsche Telekom’s German corporate business.

“Applications for large corporate customers have a certain complexity when it comes to integration and installation,” he said. “We’ll to try to make these applications simpler for smaller companies — no bells and whistles left and right.”

The company also said it will charge private customers 39 cents for using its secure electronic letter “De-Mail,” beyond three messages per month which are free. The price compares with Deutsche Post AG’s “E-Postbief” product, which costs 55 cents per mail.

–Editors: Robert Valpuesta, Marthe Fourcade.

To contact the reporter responsible for this story: Cornelius Rahn at [email protected]

To contact the editor responsible for this story: Kenneth Wong at [email protected]

NOW WATCH: Tech Insider videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at