SAP to acquire Right Hemisphere

3D graphics specialist to be bought by global software giant; 2006 loan to be paid back as part of deal

SAP announced this morning that it is to acquire New Zealand 3D specialist Right Hemisphere. SAP already had a stake in Right Hemisphere, having invested in it via its venture capital arm, SAP Ventures, in 2007.

The announcement reads: "As part of its mission to help customers innovate the way they do business, SAP will acquire Right Hemisphere, a leading provider of visual enterprise solutions based in San Ramon, California, and Auckland, New Zealand. The 3-D model-based visualisation and communications technologies from Right Hemisphere will enhance SAP software and enable visual navigation and interrogation of an entire product or asset and all its associated data in one, unified environment.

"This acquisition is consistent with SAP's strategy to complement existing applications and solutions with innovative technologies and capabilities while maintaining its successful track record of organic growth. The companies already share numerous joint customers that are seeing benefits of the combination of enterprise software and 3-D visualisation."

Right Hemisphere was granted an interest-free $14 million loan in 2006, as part of a deal to encourage the firm to retain a New Zealand presence. The loan was extended twice and was due to be paid back this month; at an audio conference this morning, Right Hemisphere and SAP said the loan will be paid back as part of the acquisition deal.

At the audio conference, the companies declined to disclose the purchase price after requests from local media representatives for this information.

Right Hemisphere's 45 locally-based staff will be retained, SAP's Hans Thalbauer, head of line of business solutions for supply chain and R&D, said at the audio conference.

Thalbauer said SAP customers will benefit from the introduction of 3D technology into the processes they use SAP software for.

Having cost, inventory and supply chain information available in this way "will speed up the process of communication between business units and will bring down the costs of product development."

The product development process will benefit from easier information sharing between engineering, manufacturing and sales and marketing, due to the Right Hemisphere 3D technology, he said.

The 3D capability will also enhance SAP customers' ability to communicate with their business partners, he said.

Right Hemisphere's technology also has application to asset management and supply chain management, he added.

He said integrating Right Hemisphere into SAP will take SAP customers closer to that industry buzz-term "the visual enterprise".

Right Hemisphere CEO Michael Lynch said at the conference "3D technology is very particular to New Zealand - there are only a couple of places in the world with that skill-set re 3D, and that capability is becoming more critical."

The visualisation of enterprise IT, aided by 3D technology, is enabling users to access enterprise software far more easily, Lynch said.

"A visual environment is an intuitive one."

Visualisation is a big part of the rise of consumer IT, he said, and the aim of the Right Hemisphere-SAP deal is to extend that usability and intuitiveness to enterprise software.

Right Hemisphere's customers include Nike, Chrysler, Boeing and Siemens Medical, as well as several mining companies, Lynch said. Many such customers in the manufacturing sector also use SAP.

SAP made a major play to get its software on to mobile devices by acquiring Sybase last year.

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Tags Mergers and acquisitionsbusiness issuesSAP

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