Paul Marriott is the chief operating officer at SAP Asia Pacific Japan. In his role, Marriott leads and directs the company’s business operations and drive growth strategies, including digital transformation. “While GST is a huge focus area for us, the cloud business is rapidly growing in India, especially with the Digital India initiative. It is a new type of digital transformation that can happen through a cloud architecture,” he told Sudhir Chowdhary in an interaction. Excerpts:
Tell us about how the APJ region, specifically India, performed in Q1?
At SAP including the Asia Pacific and Japan (APJ) region, we started the year in a great shape. We had a strong performance in Q1, especially in cloud, with a significant double-digit growth. Achieving this success at the APJ level means that our market units within Asia-Pacific are also performing well. We see the same success in India, Korea, Australia, Southeast Asia, right across the region. And while the fastest growth market for us for cloud in APJ is Australia and New Zealand, we see India also rapidly growing, especially with the Digital India initiative that the government is driving, which is the type of digital transformation that can happen through a cloud architecture.
India is quite unique for us as we have a very significant net new business numbers, where we acquire new customers that have previously never used SAP solutions. By far, India and Southeast Asia, in terms of APJ performance, have the highest growth on net new business and that is a big part of our India strategy.
You may also like to watch:
How has the cloud business grown?
From a financial perspective, in the APJ region in the last quarter, cloud and software revenue was up 21% IFRS. The cloud subscriptions and support revenue grew 65% IFRS. Japan and India were the region’s highlights for the quarter with strong results in both cloud subscriptions and software revenue. We are the number one player when you look at technologies like the SaaS category but we want to be the overall number one cloud provider by 2020. We talk about our 2020 vision globally as well as at APJ level and at the India level.
How is SAP helping companies transition to the new GST tax regime?
We have done a lot in the GST area. We have developed the ‘GST in a Box’ solution with the support of SAP Labs in India, which can also be deployed on the cloud. It provides the large and small customers with the ability to connect to the GST Network (GSTN).
On July 1, a few things that customers are looking forward to do is processing from their organisation to GSTN and the round trip, to make sure there is a closed loop on the process. Hence, it is a completely GST focused solution and we have seen a huge amount of interest in the market. We are running customer roadshows across 21 cities in India and have seen thousands of customers coming in and we are seeing a very strong adoption of the solution. Also, since the solution can be deployed on the cloud, you can just provision it and then put it into your existing applications to connect to the GSTN.
Linking back to SAP Leonardo, if you look at it as a framework of tools to build those tonnes of applications in the public cloud, the GST solution is business content that’s built in that SAP Leonardo type framework. Customers can use that but they can also expand the framework that they are investing in to do a whole lot of things beyond GST as well.
So GST is a huge focus area for us. Obviously our customers will comply from July 1, but we will do ongoing work over the next 18 to 24 months to get their systems more automated to the requirements of GST.
GST may translate into 3-5 billion invoices processed every month. How can SAP system help to deal with the volumes?
Our technology has been hugely differentiated since 2010, when we first released the SAP HANA platform. The GST in a Box solution is running on SAP HANA. We design these applications in a world where we know that scale and volume is only going to continue to increase at great magnitude over the coming years. Hence, SAP HANA was designed specifically to provide that platform for growth over the coming years where we expect the volumes to only get higher and higher.
Do you see GST to be a catalyst of growth for the Indian enterprise applications industry?
I believe it will trigger investment from SMEs into automation of business process application and that can only really lead to a wider thinking of “if I have automated GST what else can I digitise and automate in my business?” So, I do think it will lead to a greater opportunity, particularly in the SME sector, to look at processes beyond just GST. And once you have established this cloud platform and something like SAP Leonardo, you get packaged solutions in the cloud, you get the SAP Leonardo framework to let you build and create these new types of intelligent applications.