Seeing faster adoption of Cloud products in India: SAP Labs India MD

If you look at how the world is adopting cloud, there is a generic thinking that countries like the US or UK want to move towards cloud faster, says MD Khandelwal

SAP Labs India, the German software maker’s largest research and development centre outside of its headquarters, has completed 20 years. Dilipkumar Khandelwal, its managing director, talks to Bibhu Ranjan Mishra. Edited excerpts:

The key learning over these 20 years?

The key target when we came in 1998 was to cater to the local market and build products that complied with the regulations. Over these years, SAP Labs (in India) have emerged as core for the company. We are now around 7,500 R&D engineers in the labs here; overall, we are 11,500 people in India. Second biggest in R&D labs for the company across the world, not only in terms of number (of employees) but in building and contributing products for the world. 

Any change in the way SAP is leveraging the Indian labs?

If you look at SAP's product strategy, it is very difficult to imagine without the India labs' contribution. We operate in the length and breadth of the customer experience, whether in HR (personnel management), manufacturing or digital. In a nutshell, from localising here to becoming a real global R&D hub, where you cater to all the products, a big change. As a company, we have also evolved in 20 years. Earlier, we used to work only on  on-premise products but we now build only ‘cloud first' products. That's a fundamental change. 

In terms of getting talent, are you also looking at hiring people with different skillsets for SAP Labs India?

In the past five-six years, we have been very heavily focused on tapping young talent who bring a different perspective. Almost 60 per cent of our new requirement of talent is from universities. This is giving us a beautiful mix of early talent and people with experience. For three years, we have also celebrated a programme called ‘Bandhan’, for people who have completed 10 or 15 years in the company. 

All this is resonating in our success in the country. Also, we have been ranked as Number One in great places to work across India in all sectors, a great testimony. In the next 20 years, we will touch many different milestones. 

You have also set up an incubation centre at your labs in Bengaluru for start-ups. How different is the programme as compared to others?

Look at the success rate of start-ups which have worked here over two years. There are two reasons why they want to work out of the campus. Start-ups typically struggle in the area of how to scale up and become big. There is no better company like SAP to help you in going from small to big. They also look at how to go to market and access customers. We have access to big clients in India and abroad, and they look for that access. 

How many start-ups over the years and how many were funded by SAP?

In the first year after launch of the programme, we had seven start-ups, and in the second year, 16. We're now close to finalising the third batch. It’s a one-year programme; every year we have graduations and they move out. In the first batch, we funded one start-up ourselves, a company called Niki (Niki.ai, a chatbot entity). In the second round, we have not funded anyone ourselves but all the companies are quite successful. 

The bigger thing for me is our ‘global entrepreneurship programme’, wherein we fund internal start-ups. In two years, we will have two companies which have been forming internally. The first one, Brilliant Hire, which is into the HR domain, has already funded by SAP. iO (a corporate fund that identifies and funds internal ideas). The second one has also been approved for funding.

How different now is the domestic market?

If you look at how the world is adopting cloud, there is a generic thinking that countries like the US or UK want to move towards cloud faster. India is a special market because the pace of change in the country is really fast but the consumer is still very careful. They still wait and see a few customers being successful and then they go as the next one. However, this is changing very fast. That’s why we see heavy adoption of cloud products in the India market.