"Want a Beachhead In the U.S. Market? Get 50 Tons of Sand — German Software Maker SAP Kicks Off NYSE Listing Under Palms on Broad St. "

By Matthew Rose and Barbara Tierney, Staff Reporters of the Wall Street Journal
August 4th, 1998

NEW YORK — Three months ago, SAP AG executive Kevin McKay was putting the finishing touches to the software maker’s New York Stock Exchange debut: Analysts were invited and the dinner organized. Then a fax arrived showing where to put the palm trees.
Welcome to America.
Not long ago, a European company listing in the U.S. focused on American accounting standards, not marketing. Even German chemical giant Hoechst AG figured it could sell itself to Americans with a modest exhibition of life-science products outside the NYSE.

Kool and the SAP Gang

But nothing less than a beach party would do on Monday, when German software maker SAP hit the Big Board. Palm fronds swayed in a warm August breeze as volleyball teams clad in TEAM SAP T-shirts competed on 50 tons of white sand dumped at the foot of the NYSE on Broad Street. Little Anthony, wearing a frilly fuchsia tuxedo, provided live Motown music. Later, after the closing bell had rung and 7,000 SAP-inscribed beachballs had been dropped from the skies, Kool and the Gang took the stage and guests sipped tropical cocktails on the trading floor.
It wasn’t your typical German party. While SAP can hardly be called stuffy — it has conquered the arcane but sizzling market for enterprise software — most of its German executives are hardly known for their dynamism. SAP is also little known outside the industry, which isn’t surprising given that it has built its $71 billion empire on software programs whose titles look like alphabet soup — ERP, BIW, MRO and so forth.
“It’s hard to build a message around business software,” conceded Mr. McKay, SAP’s chief operating officer in the U.S. That’s especially true if the message is meant for the average American investor.

Enter Robert Zito, marketing supremo of the NYSE. In its attempt to develop a hipper, more competitive image, the Big Board has been pursuing top companies and throwing big parties. In the honor of various newcomers, the trading floor has welcomed a Holstein cow, two supermodels and giant walking bowling pins. Lions are expected later this summer to accompany a South African mining company.

How About Balloons?

The NYSE saw SAP — the world’s second-largest software maker by market capitalization after you-know-who — as a chance to prove that the Big Board is a hot exchange for today’s high-tech stocks. Bill Gates may have snubbed the NYSE, but SAP has rushed to join. So Mr. Zito decided to lay on a big bash.
At first, Mr. Zito’s message was lost on senior executives at SAP headquarters in sleepy Walldorf, Germany. If they wanted a party, SAP executives responded, perhaps the exchange could drape banners from its Broad Street headquarters? Perhaps it could release some blue balloons to match SAP’s corporate colors?
So Mr. Zito took a few senior SAP executives to da Vittoria, a little Italian restaurant in Manhattan where he was chummy with the maitre d’. Over their meal, SAP explained the themes it wanted to explore.
SAP is less a company and more like an industry, they said. In addition to its own 17,000 employees, the company reckons there are 30,000 more working for consultancies or other software outfits who live and breathe its main software package, R/3; SAP wanted to include them in the fun. SAP also hoped to make itself known to puzzled U.S. investors and to appear less Teutonic. After all, only 20% of the company’s sales these days are from the homeland. “We are tainted as the inflexible Germans and actually we like to enjoy ourselves,” Mr. McKay fretted later.

A few days later, Mr. McKay received a fax on which Mr. Zito had doodled a few palm trees across a photo of the NYSE’s columned facade.
The concept, Mr. Zito explained: If SAP’s business is a team effort, why not get all those involved to play games? Beach volleyball is “the hottest thing,” Mr. Zito said. And because it’s summer, he says, why not make it a tropical theme? “There is method behind the madness.”
Although the method and message weren’t entirely clear to Mr. McKay, he liked the idea. “That’s part of the hook,” he explains. “People will be looking for the tie-in” between SAP and a beach.
But other SAP executives took more persuading. SAP’s chief executive in the U.S., Paul Wahl, greeted the idea with a stunned silence, Mr. McKay says. So Mr. McKay and a colleague peppered him with European sporting images.
“Think of the World Cup,” said Mr. McKay.
“Wimbledon,” suggested Jeremy Coote, the president of SAP in the U.S., thinking no doubt of doubles.
Mr. Wahl eventually relented and carried the idea to SAP’s monthly board meeting — where it was almost rejected out of hand, according to people familiar with that meeting.
And little wonder. Although one of SAP’s founders, co-chairman Hasso Plattner, has a reputation for flamboyance — playing the electric guitar and piloting fast yachts — other founders and executives made millionaires through their SAP stock have kept lower profiles. “If you look at the parking lot at Walldorf, the cars that the founders drive aren’t different from any of the others,” says Andrew
Dailey, research director at the Gartner Group in Paris.
But just like Mr. Wahl, the board members eventually came around, especially after the NYSE agreed to stump up half of the estimated $2 million in costs for the bash. The tab wasn’t a deciding factor, SAP says, but it didn’t hurt. More crucial, Mr. McKay says, was winning the consent of Mr. Plattner, who complained because they couldn’t get the Rolling Stones to play.
Out on Broad Street on Monday, SAP was working hard to look hip. Jeff Stockberger, a 32-year-old New York comedian even did a bit of rap: “You know me/Team SAP/A business application software company.”‘
Nearby, SAP executives watched the volleyball matches. “I want to play,” joked Michael Pfister, vice president of corporate communications, “but they made me wear this suit.”
But the party drew a decidedly mixed reception from bystanders.
“When in Rome, do as the Romans do,” said Rod Aird, a broker with Donaldson Lufkin & Jenrette who was standing by the music stage. “If they came out and spoke German, no one would be standing here.”
Norbert Klinger, a German visiting New York was less impressed. “This is not very professional,” said the computer science student from Goettingen. “If you don’t know SAP you think it’s a sports company or a refreshing drink, not a software company.”