SAP to Invest $1 Billion in India, Double Workers
SAP AG, the world's largest maker of business-management software, said it will invest $1 billion and double employees in India, its fastest growing market in the Asia-Pacific region.
SAP has identified India as one among its eight most strategic markets in the world, Chief Executive Officer Henning Kagermann said in New Delhi today. The budget will fund research, support services and help win customers in India over five years.
Walldorf, Germany-based SAP and rivals Oracle Corp. and International Business Machines Corp. are investing in India, attracted by the availability of technically skilled workers, lower wages and a growing local market. India accounted for a quarter of the 800 customers SAP won in Asia this year.
``India is a very important market,'' Kagermann told reporters in the capital. ``It's our third-largest country in terms of number of employees.''
SAP today formally inaugurated its software development and customer support center in Gurgaon, near New Delhi, its second such center in India after Bangalore. SAP Labs, the software development center of the company, plans to add 750 more employees to take the total to about 3,500 by December. SAP, including its other units, will have a total of 4,000 workers in India by the end of the year.
Graduates
SAP is taking advantage of the large number of engineers that graduate every year. That number is expected to rise by half to 536,000 a year by March 2008, according to the National Association of Software and Service Companies, an association of software companies in India.
The number of employees in India is expected to ``easily double'' in the next five years, Kagermann said, without giving a specific number. India will contribute about 20 percent of SAP's research, services and support by the end of 2006, the company said in a statement.
SAP, which hired 1,870 workers in the first six months of the year, plans to add about 3,500 people in 2006 globally. SAP had said in November 2004 wages for software programmers in India were a fifth of what it pays in Germany.
``As long as we find the right talent, we'll continue to hire,'' Sap Labs India Managing Director Georg Kniese said, dismissing concerns the company may slow hiring because of increase in salaries.
Oracle, IBM
SAP follows Microsoft Corp., Oracle and other software makers in tapping the skills of local software programmers. IBM said in June it will triple its investment in the country to $6 billion by 2009 to provide more consulting and computer services to global customers. IBM, the largest foreign employer in India, has 43,000 workers in the country, up almost fivefold from 9,000 at the end of 2003.
Oracle, the world's third-biggest software maker, plans to continue investing in India and adding to its 9,500 employees in the country, Derek Williams, chairman of Oracle's Asia operations, said in June.
The Indian software centers are SAP's largest facilities outside Germany. The first software center in Bangalore was started in November 1998.
SAP, which has sold its software to 1,050 customers in India since it started a decade back, has targeted a total of 15,000 clients by the end of 2010, Alan Sedghi, chief executive of the company's South Asian unit, said today.
Big Customers
The company has won 200 customers this year, which is more than the number of customers the company added in the whole of 2005. SAP's customers include 21 of the 30 biggest companies that constitute the Bombay Stock Exchange's benchmark Sensitive Index. About half of the customers are small and medium-sized companies, he said.
More orders in faster-growing markets such as India is helping SAP to counter slower growth in mature markets such as Europe, Africa and the Middle East, its biggest contributor to sales.
SAP, which missed analyst estimates for license sales last month after failing to close some orders on time, said some of these contracts have now been completed. Kagermann reiterated the company's full-year outlook for license sales growth.
Failure to close some orders in the second quarter was not the beginning of a trend, he said.
SAP AG, the world's largest maker of business-management software, said it will invest $1 billion and double employees in India, its fastest growing market in the Asia-Pacific region.
SAP has identified India as one among its eight most strategic markets in the world, Chief Executive Officer Henning Kagermann said in New Delhi today. The budget will fund research, support services and help win customers in India over five years.
Walldorf, Germany-based SAP and rivals Oracle Corp. and International Business Machines Corp. are investing in India, attracted by the availability of technically skilled workers, lower wages and a growing local market. India accounted for a quarter of the 800 customers SAP won in Asia this year.
``India is a very important market,'' Kagermann told reporters in the capital. ``It's our third-largest country in terms of number of employees.''
SAP today formally inaugurated its software development and customer support center in Gurgaon, near New Delhi, its second such center in India after Bangalore. SAP Labs, the software development center of the company, plans to add 750 more employees to take the total to about 3,500 by December. SAP, including its other units, will have a total of 4,000 workers in India by the end of the year.
Graduates
SAP is taking advantage of the large number of engineers that graduate every year. That number is expected to rise by half to 536,000 a year by March 2008, according to the National Association of Software and Service Companies, an association of software companies in India.
The number of employees in India is expected to ``easily double'' in the next five years, Kagermann said, without giving a specific number. India will contribute about 20 percent of SAP's research, services and support by the end of 2006, the company said in a statement.
SAP, which hired 1,870 workers in the first six months of the year, plans to add about 3,500 people in 2006 globally. SAP had said in November 2004 wages for software programmers in India were a fifth of what it pays in Germany.
``As long as we find the right talent, we'll continue to hire,'' Sap Labs India Managing Director Georg Kniese said, dismissing concerns the company may slow hiring because of increase in salaries.
Oracle, IBM
SAP follows Microsoft Corp., Oracle and other software makers in tapping the skills of local software programmers. IBM said in June it will triple its investment in the country to $6 billion by 2009 to provide more consulting and computer services to global customers. IBM, the largest foreign employer in India, has 43,000 workers in the country, up almost fivefold from 9,000 at the end of 2003.
Oracle, the world's third-biggest software maker, plans to continue investing in India and adding to its 9,500 employees in the country, Derek Williams, chairman of Oracle's Asia operations, said in June.
The Indian software centers are SAP's largest facilities outside Germany. The first software center in Bangalore was started in November 1998.
SAP, which has sold its software to 1,050 customers in India since it started a decade back, has targeted a total of 15,000 clients by the end of 2010, Alan Sedghi, chief executive of the company's South Asian unit, said today.
Big Customers
The company has won 200 customers this year, which is more than the number of customers the company added in the whole of 2005. SAP's customers include 21 of the 30 biggest companies that constitute the Bombay Stock Exchange's benchmark Sensitive Index. About half of the customers are small and medium-sized companies, he said.
More orders in faster-growing markets such as India is helping SAP to counter slower growth in mature markets such as Europe, Africa and the Middle East, its biggest contributor to sales.
SAP, which missed analyst estimates for license sales last month after failing to close some orders on time, said some of these contracts have now been completed. Kagermann reiterated the company's full-year outlook for license sales growth.
Failure to close some orders in the second quarter was not the beginning of a trend, he said.