SAP AG plans to expand its focus on business intelligence (BI) software over the next year.

“Business intelligence software is an area in which we aim to expand in 2005,” said SAP spokesman Markus Berner.[cq] “We already have an offering in this space and substantial expertise, but we want to increase our focus. We’re planning to devote around 100 people to this effort.

Asked about a possible acquisition, Berner said nothing is planned but it’s a possibility.

BI software is designed to quickly cull relevant material from massive amounts of data collected by business systems. It allows companies to put critical data into the hands of business users who need it to do their jobs.

Retailers, for instance, can use BI software to make decisions about merchandising, inventory management, financial reporting and store operations, alerting them, for example, to impending out-of-stock conditions and suggesting solutions such as reordering merchandise or transferring products from one location to another. Currently, the BI market is dominated by a group of smaller vendors, including France’s Business Objects SA, Ottawa-based Cognos Inc., and SAS Institute Inc. in the U.S. One of these could be flashing on SAP’s radar screen.

The Walldorf, Germany, vendor has a history of moving into niche software markets, such as SCM (supply chain management) and CRM (customer relationship management), and later becoming a key supplier.

At its SAP TechEd conference in San Diego, California, last week the company demonstrated a prototype of a new BI technology for searching inventory or profitability information stored across different systems. The technology could provide responses 10 to 1,000 times quicker than using traditional techniques, the company said.

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