Last week, the German software company reported a 25% year-on-year increase in its overall cloud business for the second quarter ended June at €4.15 billion (around Rs 3,700 crore). Its total revenue that includes software enterprise solutions, cloud and software business, grew by 10% to €8.29 billion (around Rs 7,500 crore).
The software maker also called out its cloud backlog revenue at €14.8 billion (approximately Rs 13,400 crore) that provides predictability or visibility of revenue for the next four quarters.
“Brazil, Canada, Germany, India, Japan, and South Korea had outstanding performances in cloud revenue growth while China, the US, and Saudi Arabia were particularly strong,” SAP said in its quarterly statement.
However, India still remains a comparatively small market for SAP, among its top 10-15 markets.
Discover the stories of your interest
In India, SAP is also investing in data centres with presence across Chennai, Hyderabad, Mumbai and Pune.“Our focus on adoption and success of our platforms has become the core of our game plan.” Prasad said, adding that SAP is helping its customers unlock true value of their investments with its platforms linking it to their businesses’ key performance indicators.
This has helped its cloud revenue growth to accelerate from lower single-digits to higher double digits today, he said.
In India, Prasad said, SAP’s cloud business is growing both through public sector undertakings (PSUs), which is a huge market currently accounting for around 17-18% share, and through large enterprises and their ancillary units.
Besides auto, steel and cement sectors, the company aims to ride on the manufacturing wave, focusing on mid-market enterprises.
Highlighting that India’s impact on the global supply chain is unprecedented, Prasad said about eight out of 10 customers of SAP are from the mid-market space. “Roughly, about 28% of our business would come predominantly from that market from a value standpoint,” he said.
When a large manufacturing organisation adopts cloud, their key suppliers and their clients also embrace it, Prasad said. “So, the entire value chain gets captured and you get into that network economy,” he said.
The global giant has been present in India for 26 years with over 15,000 employees including its research and development (R&D) centre SAP Labs. It has more than 10,600 customers from small and medium-sized enterprises.
Focus on Talent
SAP expects to boost the cloud growth momentum with its focus on business AI (artificial intelligence). India has a combination of both technology and talent availability, Prasad said.
For now, SAP India is focusing on getting talent from tier-2 and 3 cities such as Baroda, Nagpur, Meerut, Coimbatore, and even places in the Northeast where it is gaining business. The company does not share an India-specific split of the hiring numbers.
SAP said its global restructuring launched in January will impact between 9,000 and 10,000 positions, higher than the original estimate of 8,000 jobs.
Without divulging its impact on Indian operations, Prasad said there is a need to create quality talent along with quality teachers of AI and it is a “big journey from education to employability”.
According to him, India needs a programmatic approach and public-private partnership with an intent.
