SAP’s German headquarters is advantageous amid Sino-U.S. trade tension

SAP’s German headquarters is advantageous amid Sino-U.S. trade tension

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SAP SE, the German business software company, is in a better position than its U.S.-based rivals for being less prone to likely restrictions on doing business with China, company’s Chief Executive Bill McDermott said in an interview.

SAP is involved in a business of making software related to human resource and financial management for large businesses and despite the continuing trade spat between the United States and China, the software maker is focusing capturing business from China’s state-owned and large enterprises, McDermott told Reuters.

SAP’s rivals in the United States such as Microsoft Corp have been stopped from selling goods or services to Chinese firms especially Huawei Technologies Co Ltd as it was blacklisted in May by the Trump administration. On the other hand, some U.S. firms such as Cisco Systems Inc say that because of the trade war, companies from the United States will no longer be allowed by Chinese state-owned companies to take part in bids to get contracts.

Germany is in excellent relations with the businesses and enterprises at public and private sector level, and that is a fact without any doubts, which helped SAP, McDermott said in an interview in San Francisco on Sept. 6.

SAP has a market capitalization of about 131.3 billion euros ($145 billion) and it does not disclose how much revenue it has been generating from China. But the company is not in a completely risk-free position from trade war as it could also face export restrictions in case of an adequate amount of a software product’s content has been coming from the entities in the United States.

SAP last year acquired two American software companies Qualtrics and Callidus Software for more than $10 billion, but McDermott who is the first American CEO of the German software maker, said that because of the trade tensions, SAP has not changed the places of making its software products.

 

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I handle much of news coverage for tech stocks, and occasionally cover companies in different sectors. In the past, I've written for other financial sites and published independent investment research, primarily on tech companies. I have a B.A. in Economics from Columbia University. I'm based out of San Diego, but grew up in Southern New Jersey. I play basketball and tennis in my spare time, am a long-time (and long-suffering) fan of Philadelphia's sports teams, and alternate daily between using an iPad Air, a Galaxy Note 3, and one or two Windows PCs.

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