SAP has identified several engines for growth as part of its efforts to reach its ambitious 2010 expansion target of 100,000 customers, and the Indian market is the latest one to receive the full force of its attention.
In a profile-raising exercise, the entire executive board visited India. The company also announced that it had doubled its Indian customer base over the past 12 months, from 1,000 to 2,000 organizations. The growth rate reflects rising levels of activity in the Indian market but could also be indicative of some of the problems large enterprise software vendors have faced in establishing themselves in the market.
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, said SAP CEO Henning Kagermann.
The SME sector is also a growth engine and the fastest growing segment for SAP in India. So far SAP has targeted it with the All-in-One and Business One product lines. The imminent A1S release will add to the portfolio of relevant products. SAP has an ecosystem of 200 partners in India. Given the size and scope of the market, that is meager coverage so the on-demand A1S product could turn out to be the volume product for emerging markets like India.
SAP was also keen to demonstrate it was putting money into India, a country that has already been designated a strategic hub. The company reaffirmed the $1bn investment it committed to in 2006. A large portion will go into expanding the Indian SAP Labs operation, which is a global development and services and support unit and is SAP’s largest research-and-development hub and support presence outside Germany. SAP Labs operates in two locations: Bangalore and Gurgaon. The original Bangalore facility will continue with its global development role, while the Gurgaon center will concentrate on global service and support. It will be scaled up over the coming years in order to drive and support SAP’s business in India.
SAP has also expanded its partnership with the global IT services division of India-based Wipro. Under the new agreement Wipro will become an SAP global services partner and will establish a solutions lab in Bangalore to showcase enterprise SOA, industry best practices, and service-delivery models. The solutions lab will be based on the model used at the SAP Co-Innovation Lab in Palo Alto, California.