SAP AG's founder Hasso Plattner said the largestbusiness-software maker's programs remain too cumbersome to impressa generation of users weaned on slick apps made by Google Inc. andFacebook Inc.

To help attract the talent SAP needs to keep pace with users'expectations, Plattner today opened a development center outsideBerlin to incubate technology and foster young programmers. The“Innovation Center” sits on a Potsdam lakeside 9 kilometers (5.6miles) from the research institute that bears the SAP chairman'sname.

SAP plans to make the site a key development hub and willpotentially double its staff to 150 to work closely with technologystartups, said a person familiar with the matter, who asked not tobe named because the plan isn't public.

“The biggest weakness of SAP worldwide is the user interaction,”said the 70-year-old, who was joined by other top SAP executives.“We don't want to leave anyone behind, but we have to move thisfranchise forward.”

The company Plattner co-founded 42 years ago is undertaking atricky transition from programs for managing supply chains andfinancial systems installed on customers' computer servers to newercloud-computing applications delivered over the Internet. Hand inhand with the change is a database called Hana and new userinterface that offer customers faster response times and a moreWeb-like look.

“SAP has to be closer to the 150,000 students in Potsdam andBerlin,” Plattner said, wearing a purple sweater and addressing aroom full of staff, customers and journalists. “Not everyone wantsto come to Walldorf.”

Plattner was referring to SAP's headquarters more than 400kilometers southwest of Berlin. “We have to retrain 20,000developers inside SAP.”

To be sure, re-making the business software to attract newcustomers isn't as simple as opening a shiny development centernear the German capital, a point Plattner underscored when heswatted away questions about other parts of the world rivalingCalifornia's Silicon Valley.

The shift to cloud computing is also hurting profit. SAP hasalready pushed back its goal of reaching an operating margin by twoyears to 2017 because rented Web software costs less upfront thanthe programs it traditionally offered.

The company's revenue may reach 19.1 billion euros ($26 billion)in 2015, according analysts' estimates compiled by Bloomberg. Thecompany had forecast 20 billion euros in sales for that year.

Late Cloud

“SAP is thinking more optimistically about growth of its corethan we are,” Rick Sherlund, a Nomura Securities analyst whorecommends buying SAP shares, said in a Feb. 4 note. “SAP is lateto the cloud.”

To bridge the gap, the company is pouring effort into a simpleruser interface and developing products SAP can continually updateonline.

“Those two things have been traditionally difficult for SAP, butwe have been putting a lot of energy into that recently,” VishalSikka, SAP's chief technology officer and a board member, said in arecent interview.

At the two-day event where Sikka also spoke, SAP is showcasinghow its software can be applied to new areas — such as personalizedmedicine and sports statistics analysis — that can help with thetransition.

Co-Chief Executive Officer Bill McDermott also appeared, sayingthat by 2025, more than 70 percent of workers would belong to the“millennial” generation born after the early 1980s.

The data-crunching Hana software — an acronym for high-performance analytic appliance — rapidly processes millions ofdatabase records ranging from business data to genome sequencesfound in cancer patients' blood. The vast quantity of informationamassed by businesses, governments and universities that requirespowerful computers for storage and analysis is often referred to asbig data.

SAP's chairman, with a fortune of $10.6 billion according to theBloomberg Billionaires Index, has had a long-running professionalfeud with Oracle Corp. CEO Larry Ellison. Plattner incubated Hana,which competes with Oracle, using a small group of developers nearBerlin. Sales of Hana grew 61 percent last year to 633 millioneuros ($864 million), and are a bright spot amid slower growth fortraditional software.

The shares were little changed at 57.18 euros at 3:03 p.m. inFrankfurt, valuing the company at 70.3 billion euros.

McDermott, an American who will take over as sole CEO in May,told investors in New York last week that SAP is dedicating moresalespeople to online software.

Plattner, who is SAP's biggest shareholder with a 10 percentstake, also plans to address how the new center in Potsdam can workmore closely with the Hasso-Plattner Institute, an academicresearch body he has personally endowed.

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