India emerges strong on SAP radar

MUMBAI, INDIA: A flurry of announcements topped the opening day at the ongoing SAP Summit 08 in the city. First, SAP India continues to have a strong presence, along with an ever-increasing tide of growth. Next, SAP Ventures investment in the country has added muscle to the Indian innovation. Third, SAP's Business ByDesign is now available in India. To top it all, SAP India is now undeniably, SAP's ‘Jewel in the Crown’.

In a separate development, MRF Tyres has gone live with an extensive SAP ERP application across over 1,000 users. The SAP application replaces the entire footprint of Oracle applications previously deployed by MRF.

MRF replaced applications from Oracle and has gone live on SAP's leading ERP and CRM solutions based on the SAP NetWeaver platform. It covers the head office, six factories and over 100 sales offices to provide a comprehensive view of the factory information.

SAP India the star



Commenting on SAP India's achievements, Ranjan Das, president and CEO, SAP Indian subcontinent, said: "SAP India has been the fastest growing business division for SAP. We also had the largest ever Q1 (revenue) in SAP India's history in 2008." SAP India also signed its largest ever deal in Q1.

Re-iterating its leadership position, SAP India clocked 67 percent growth in software license revenue during Q1-08. Revenues from the education business grew 100 percent, while SMEs business grew 47 percent and consulting business by 34 percent. "All segments are adopting SAP," confirmed Das. SAP India doubled its revenue and customer base last year as well. The key wins are from all over the subcontinent, covering all verticals." Das added that SAP India also opened its 50th e-Learning center.

Some sectors witnessing significant wins include utilities, BFSI, automotive and retail. New customers added include Delphi TVS, Greaves Cotton, Easun Reyrolle and IBF Industries. The public sector vertical also witnessed strong growth, with customers such as Mormugao Port Trust, BEML and Chattisgarh State Electricity Board. There were certain win-backs as well, such as Moser Baer, Sasken and Greaves Cotton. Das pointed out, "Customers are migrating from other platforms to SAP."

"India is now a support hub for SAP as well. There are seven such global hubs. India is the third largest -- after Germany and the USA," said Das. Also, five of SAP's 12 global services partners are from India -- Infosys, Wipro, TCS, HCL and Satyam.

Bill McDermott, president and CEO, SAP Americas & Asia Pacific Japan said: "India is a great source of pride. I am extremely proud to announce that with holistic growth and strong continued momentum, SAP India has emerged as a 'Jewel in the Crown' for SAP worldwide. We at SAP pledge to strengthen our commitment to the Indian market and continue to be the catalyzing force behind this unprecedented growth story."

SAP Ventures to help Indian entrepreneurs



SAP has announced the addition of SAP Ventures in India, which has now decided to make an India-focused investment. Das noted, "They will be helping entrepreneurs in India." Directly investing in India, SAP Ventures will foster and nurture innovation in India. It will help Indian companies build fast-growing companies with a global footprint.

Investing in India became a priority for SAP Ventures, as India is among the fastest growing economies and has a large talent pool at the forefront of a technological revolution.

SAP Ventures has been investing in innovative and early-stage companies. It is likely to target enterprise, enterprise IT companies, etc., in India. It is also likely to target the retail segment as well. Das noted: "Retail is a very important segment for us. We have had a lot of success in retail. The Indian retail segment is highly unorganized -- only 3-4 percent is organized. Within that, all are in SAP."

SAP Ventures is looking at about a dozen Indian companies, and will likely close on three or four. The company invests out of the SAP balance sheet, and there's no fund as such. "We get inputs from people on the ground, and then take a decision. SAP Ventures has been investing since 1997, and has so far invested in 38-39 companies. As for India, as mentioned earlier, it is looking to close some deals within the next three to six months. Generally, a deal size is said to be close to $4-5 million.

SAP in other areas



Commenting on the topic of looking at the franchise segment, McDermott added: "The franchisees in the US are all standardized on SAP. It will be the same here in India, as the market gets organized."

With regard to SAP's focus on the emerging markets, Das said, "We also support the Sri Lanka region, which has several customers. McDermott added: "The BRIC countries, the Middle East, Latin America, Africa, and even Colombia are all fast moving regions. We are focusing much more on BRIC and all the other such emerging markets." He added that customers had been switching to SAP in great numbers.

SAP Co-CEO Henning Kagermann recently gave guidance of 24-27 percent growth in software and software-related services. When quizzed on Kagermann's guidance McDermott said: "Our business continues to be strong. Latin America has been growing fast, while both Europe and the US are also in solid double digits. SAP is on the CEO agenda now, and not just the IT agenda."

"If you to have a collaborative network view and globalization focus, how can you do that without investing in SAP," he added. "If you need to grow and be more efficient, you need SAP."

SAP has also introduced Business ByDesign in India, its most adaptable on-demand business solution. However, globally, SAP has cut back on its investment on Business ByDesign. The reason, according to McDermott is: "We feel that we need to get the cost model right. Our clients want some more things, and so we will build those on to the product."

On the subject of experiencing different skill gaps, Das pointed to areas like SCM, governance, risk and compliance. "In India, we have also seen a shortage of qualified SAP consultants, especially in tier-2 and tier-3 cities," he said. "We have a program going on, where we train people at different levels. This is part of our e-Learning program, Das added.

McDermott added: "We also have a University Alliance Program. Demand for SAP will intensify as you move into fast moving markets. We offer five things -- platform of an integrated nature, industry specific nature of platform, it is for everyone, it is for emerging markets, and it is for emerging areas, e.g., mobile CRM."

SAP is also focusing on the government sector. Das said: "Yes, government entities are looking at automation -- at national, state and local levels. There will be massive automation in India over the next five to seven years. A whole range of best practices would get implemented. Later, the best practices would come out of India."

SAP has also been very strong as far as upgrading of customer solutions is concerned. McDermott said that once an upgrade has been made, all innovations could be delivered as service packs. He added: "Making every customer have a best-run business is everything that we focus on. There is no stopping. We will keep growing. When clients invest in SAP, we come right back and invest in them."