German business software giant SAP is sensing an opportunity to grow even in a difficult business cycle in India. In an interview with FE?s Goutam Das, MD of SAP India Peter Gartenberg talks about new opportunities and the firm?s new positioning.
There has always been a link between the economy and discretionary spending. Buying SAP is discretionary. How does business look in this environment?
You could say SAP is discretionary, but the good thing about our portfolio is that it helps companies during both economic trajectories. We help customers reduce wastage. That is good in a growth economy, but it is even better in a down cycle. Often, a down cycle makes people get tighter with their business operations, makes them push for productivity. You need to have a more disciplined approach to resource allocation, hiring, management of employees, operational efficiency. That is where we have a lot of tools to offer.
Is the growth you are seeing now vertical-specific?
It has been across the board. I was used to getting islands of fast growth. Instead, we are seeing growth across the portfolio and across market segments. Initially, I thought it was growing economy. But I realised that a lot of it had to do with covering unserved markets. Every time we expand our reach, we see growth.
SAP has never been strong in selling core ERP to the banking segment in India. How is the vertical shaping up?
Yes, we don?t have a huge presence in core ERP in banking. However, in the analytics area, we have always been strong. Our whole business objects portfolio is very strong in that segment. Sybase is strong too. Now, there is lot of interest in Hana (an in-memory platform) ? they are doing big data applications. With Hana, it is more than manage. It is how to get real time, actionable information out of your data. On the data warehousing market, India is not that matured. We are seeing customers leapfrogging and go right to Hana. Warehouse is based on 30-year old technology and architecture and it is not a pretty picture. Hana cuts through all of that and simplifies the landscape.
SAP does not want to see itself as an ERP company any longer but as a technology utility. Why this change of positioning?
We are much more multi dimensional. We have an ERP legacy; we pioneered it and built that market. However, there is significant growth in underlying technology products ? we are getting into the database and the big data market. Even more exciting is what is happening on the applications side. If you look at our revenue mix, everything is growing. About 50% of our revenues are coming from non-ERP areas ? analytics, CRM, supply relationship management, procurement, governance risk and compliance.
Considering that many large corporations run on SAP, how is the firm preparing for the GST regime?
Obviously, we have to do it. That?s where our leverage of SAP Labs in the localisation game is a competitive advantage for us. It allows us to respond to those changes very quickly. We have the resources here to respond and that would help our customers a lot because they don?t have to engage in a lot of customisation or development themselves.