SAP's user conference is looking at its customers' concerns, not products, reflecting its focus on clients needing solutions, writes Karlin Lillington.

The view from the temporary office of SAP joint chairman Mr Les Hayman is not outward to the sunny hills or waterside of Lisbon, but inward to the exhibition hall below.

Down there, among the booths and mini-stage areas, delegates to the annual SAPphire European SAP user conference check out software and hardware, and listen to pitches from the German software giant and its partner companies.

Is there an intrinsic value to such annual gatherings, on which companies spend and spend (Portugal's biggest rock band played at the event's closing night party), or are they all image, an attempt to prove that all is right with the corporate spirit if not the corporate coffers?

Mr Hayman, a moustachioed, voluble Australian in charge of SAP's European, Middle East and Asian market, thinks the meetings allow people to gather "in communities that aren't geographic" - they get a wider sense of what other users are doing and they get a chance to keep up to date on what SAP is doing. And of course, the company can target new and existing customers, trying to migrate them to the latest software and service offerings.

But perhaps more importantly, Mr Hayman thinks you can plot the development of SAP through its SAPphire events. This year, for example, "the whole executive session was on business issues and what the customers are experiencing right now - not demonstrations of new products". Thus his office view is, perhaps, metaphorically appropriate. Not out to a sunny, blue horizon, but inward to anxious customers looking for solutions.

And that was the emphasis of joint chief executives and chairmen, Mr Hasso Plattner and Mr Henning Kagermann, at their respective keynote speeches.

They were cautious - even dour - about the economy, especially Mr Plattner, who spoke of "tough times in the worldwide economy and a lot of uncertainty", with no major change coming this year or probably next.

The duo - who are both surprisingly, indeed refreshingly, candid corporate leaders when talking to the press - stressed the opportunity for companies to squeeze value out of their existing hardware and software. The phrases that matter, noted Mr Kagermann, are "return on investment" and "total cost of ownership".

Companies need to stay on top of the unwieldy flow of information that the internet era has enabled, he said. SAP could offer tools for getting "clean" information, similar to the way in which electricity brought clean energy to an industrial era full of coal smoke and steam.

Mr Plattner detailed some of the ways in which SAP wants to do this: through a new browser-based portal that can be better personalised for users than in past versions of the company's big software programs through an "exchange infrastructure" that lets SAP pluck data from other programs and manage it in ways that produces what he calls "business intelligence".

In a major change for a company known for its big enterprise software package, MySAP, which manages financial and operational information for large corporations, the company is now building software that manipulates data from the databases of other programs, rather that software that builds a massive database of its own.

Another daring change is the introduction of a new, slimmed-down version of the big packages designed for small to medium-sized companies. The software, programs called BusinessOne and Sap All-In-One, could nibble into SAP's market for the big-ticket MySAP program for corporates. But, said SAP executives, they want the small and medium-sized enterprise (SME) market to make up an ambitious 15-25 per cent of global revenue in the next few years and they are marketing the software strongly.

They want non-SAP using SMEs to believe they take their needs seriously, after previous, lukewarm software releases that some smaller companies at SAPphire said remained too complicated for them. SAP also sees its new programs as a low-cost alternative for the smaller acquisitions its big enterprise clients are making in the current environment of buy-outs and consolidation. Up to 40 per cent of all SMEs are subsidiaries of large corporations, noted one SAP executive.

One large British energy company at the event confided that this aspect would be of great interest to it - it could get smaller acquisitions onto BusinessOne to synchronise systems and data, always a major acquisition headache, and save the costs of adding more software "seats" to the main company's MySAP licence.

As for criticisms in previous years that it was too big and slow compared to brash dotcom challengers, and took too long to give its software a strong internet element, SAP seems to be the one that's quietly confident these days.

Most of the challengers are gone - even mentioning one's name during a keynote brought loud laughter from the audience for Mr Plattner.

Mr Hayman insists that the company always had an internet-based approach as soon as it was clear how central the Net would be for businesses.

"We just didn't understand branding," he says.

"I mean, we had a corporate logo that looked like 'Software R Us'," he jokes.

But the company has changed that, he says. Certainly, they've weathered the downturn better than most and Mr Plattner insists that the company will meet its projections, if not through maintaining revenue then by cutting costs as severely as is necessary. However, SAP hopes to drive revenue through doing what many former software or hardware-only companies have done already - developing a higher-revenue services arm.

"I think there's lots of opportunity for us now," muses Mr Hayman, gazing out over his mingling customers below.