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Software Giant SAP Expanding in Asia, Forming Partnerships

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SAP recently moved its global support organization from Germany to Beijing. (Image: Ilker)
SAP recently moved its global support organization from Germany to Beijing. (Image: Ilker)

BUSINESS

  • SAP to expand in Asia, hire employees in China and India
  • Asia-Pacific accounts for 11% annual sales
  • SAP Business One software sees 14 new customers in China every day.

The world’s largest developer of business management software, SAP AG, is open to new acquisitions in Asia. In addition, it plans to hire more staff in China and India.

Asia is a growing market for German-based SAP. Third quarter 2011 saw 15% of the company’s revenue come from Asia-Pacific, with the largest growing areas being China, India and Japan.

Asia-Pacific: 11% of Yearly Sales

SAP’s goal is to reach $27 billion in annual sales by 2015. Currently, Asia-Pacific accounts for 11 percent of the company’s yearly sales.

Stephen Watts, president of SAP Asia-Pacific and Japan, told Reuters at the China Investment Summit: “In your question are we open to acquisitions in Asia - yes, we are. We are most certainly open to acquisitions, but it has to bring incremental innovation to the customer.”

At the end of the second quarter, SAP had 5,500 employees in India and 2,600 employees in China. The plan is to hire 2,000 additional employees in China; it will also double the number of its offices to 10.

This news comes after the Chinese government announced plans to help small businesses with taxes and financing. SAP develops its Business One software in China. Business One software is targeted for small- and medium-sized companies. On average, there are 14 new Business One customers in China every day.

SAP co-founder and chairman Hasso Plattner told Bloomberg: “With that product, we can adopt very quickly in China because it’s developed here by Chinese people. . . China is moving so fast. We made the promise that we will take extra care of this market, extra investment but also extra engagement with the customers.”

SAP spokesman Hubertus Kuelps says the company’s spending in China between 2012-2015 will be $2 billion. SAP recently moved its global support organization from Germany to Beijing.

New Partnership

SAP announced early this month its new partnership with EMC and VMware. The partnership will serve to develop services, platforms and tools in relation to SAP’s cloud software and visualization, applications and business networks.

Dr. Vishal Sikka, a member of SAP’s executive board, told media: "We are co-innovating with industry leaders in our vast ecosystem to deliver openness and choice to customers, making it much easier for them to adopt cloud technologies."

The three companies will be working together to create new ways for delivering SAP software.

Also earlier this month, SAP finalized its acquisitions of Crossgate. SAP will use Crossgate to update its social collaboration tool, StreamWork, and to develop a new business networking tool.

Key Statistics – World Technology Spending (source: Gartner)

  • The IT market worldwide is predicted to have grown over 7% by the end of the year, reaching $846 billion. That is 6.6% higher than in 2010.
  • The segment with the strongest growth is the computing and hardware segment, which should hit nearly 12% in 2011.
  • Sales of public cloud services globally should total $89 billion for 2011, compared to sales of $74 billion in 2010.
  • By 2015, it is predicted that public cloud services market will reach $177 billion.

By Melina Druga for
Melina Druga is an American writer and editor. She is the author of Enterprising Women: Practical Advice for First Time Entrepreneurs.

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