SAP reinforces India strategy

German software firm SAP AG, one of the largest providers of business application software, has doubled the number of customers in India to 2,000 in the past year and reaffirmed plans to invest $1 billion in the country to boost growth.

The company said today that it was the first enterprise software vendor in India to cross the 1,000 customer mark, which reinforced its leadership in India.

The company witnessed a growth of over 25 per cent in revenue from its Indian business in the first half of fiscal 2007.

"The unprecedented growth that we are seeing from India is one of the best examples of how our 2010 strategy translates into action," Henning Kagermann, SAP CEO and chairman, said after a meeting of the company's executive board in New Delhi today.

"Markets like India are at an inflection point when it comes to the adoption of technology by businesses of all shapes and sizes. For instance, it took us nine years in India to reach the 1,000 customer mark, and only one to double it."

SAP won 498 customers in India last year and has added 600 so far in 2007.

The $1 billion investment underlines India's growing importance as a global hub for technology outsourcing and research for multinationals such as IBM, Microsoft and Intel Corp.

The firm has identified India as one of eight strategic markets to power its expansion, a prominence underscored by its decision to send its entire executive board to India.

A large part of the investment will go into new e-learning centres and recruitments. It will add five more centres to the 25 it has now.

Globally, the company has set itself a goal of reaching 1,00,000 customers by 2010. The company is planning to expand the addressable market for enterprise software solutions by aggressively targeting small- and mid-size enterprises (SMEs) and emerging markets.

"SAP Labs India is today the largest research and development hub and support presence for us outside Germany," Kagermann said. "While the Bangalore centre will continue to play a central global leadership role, we now foresee the Gurgaon centre focusing on global service and support scaling up significantly in the next few years to enable us to meet our goals for India."

Kagermann also hinted at potential acquisitions for the year reaching a similar number as that last year.

"We are looking at a similar number and similar size of companies to acquire as we did last year, when our largest acquisition was around $200 million," he said.

SAP began its operations in India in 1996 and had by 2006 garnered a market share of 34.4 per cent in enterprise resource planning (ERP), 10.3 per cent in customer relationship management (CRM), 39.3 per cent in supply chain management (SCM), according to analyst firm IDC. The company is the market leader in the SME space (Frost and Sullivan).

SAP also said that Wipro, the country's number three software services exporter would be a global services partner and establish a solutions laboratory in Bangalore.