Bangalore should not be the next Silicon Valley: SAP Labs India MD

Thomas K. Thomas
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V. R. Ferose is leading the company into uncharted territories

He does not have an MBA degree but manages 5,000 people. He is also a non-IIT engineer but he heads the SAP Labs in India. V. R. Ferose, the 38-year-old Managing Director of the German software company’s Indian R&D centre is also known as the marathon man. That’s because he regularly competes in half-marathons in various Indian cities and is also a sports enthusiast.

Talk to him and you feel like he is more of a people’s manager than a technologist. Ferose says he spends more time with social entrepreneurs as that is where the next big idea could come from. Business Line met up with this young achiever on the sidelines of a media off site event in Thailand to know how he is leading SAP into uncharted territories.

SAP has traditionally been known for business solutions. Are you looking at moving into new areas?

The business solutions will be our bread and butter but we strongly believe we have to get into uncharted territories. You have to be open to it and allow accidents to happen. At present at least 500 people in SAP Labs India are working ground-up in such uncharted areas. MD is my day job and at night I work with this team to develop applications in new areas.

Can you give examples of some new areas SAP is looking at?

I spend 50 per cent of my time outside SAP and that’s where I get my ideas and inspiration. For example, I am working with Kiran Bedi and Arun Shourie in new areas. We see huge opportunity where technology can be the biggest differentiator in the field of disability. At SAP we are building applications for autistic children to learn better. We didn’t start with the business objective but the more we got into it the more opportunity we are seeing. It’s not a CSR project, proper business can be done.

SAP is getting into mobility, cloud and big data in a big way mostly through acquisitions. What role do you see for the R&D lab then?

Statistics show that everyone is going to buy. But a HANA-like product (SAP’s latest enterprise platform) cannot happen if it’s not done internally. It’s a breakthrough product. A lot of completely new innovation will come from internal R&D. That’s why the start-up culture has to be there. So we want to be a large company with the mindset of a start-up.

Will you add more people to the Indian labs?

We currently have 31 per cent operating margins. The more you add people the more margins go down. By 2015 we want it to have 35 per cent margins. So that’s a stiff target but we cannot be adding big number of people to achieve that.

Do you see SAP moving into the hardware space? Any other new space you see for SAP?

We don’t have a strategy to be in the hardware space. We still believe that customers should have a choice and not lock them into a stack. In terms of new segments, we don’t have a big presence in social media yet. We were not there in the database segment but today with HANA we see a big opportunity. We don’t have SAP installed in the banking segment in India. This, even though the banking development sits in India. We are trying to crack into that.

Is cost still a huge advantage when it comes to investing in the Indian labs?

It is still a huge advantage. We are 60 per cent cheaper than some other markets. Even China is higher in terms of R&D cost per developer. A lot of the product ownership is moving to India because of our ability to move faster. The speed of innovation is important.

Can India be the hub of innovation and the next Silicon Valley?

We should not be the next Silicon Valley. Let’s become the next big Bangalore. In the world of innovation the differentiator we have is very unique. So let’s use that as the advantage rather than copy Silicon Valley. The biggest advantage is our ecosystem which is based on the minimalistic things we have. We have a ‘jugaad’ mindset which is very unique to India. In the Valley, technology is five years ahead so you will only be catching up if you try to copy. We should develop unique solutions for the problems that we have.

Is being a young leader an advantage?

If you look at the industry today, the only way to survive is that you become faster than the speed of change in technology and that can happen if you are young. Why are sportspeople not over 35? Our industry is also like that because your mind ‘tears off’ after some time. You need agility, you need a youngster’s mindset to manage a technology firm.

Does your interest in sports help you as a manager?

I am big-time into sports and that brings additional benefits. Your perspective is different. Not just sports but also experience of diverse culture. I am from Kerala but was brought up in West Bengal. So I am also high on things such as theatre and literature. That’s what is needed for an innovator. I take the best learning from other areas and implement that in SAP. If you do that over a period of time, magic will happen. For example, I do a lot of work social entrepreneurs as they are the biggest innovators. Most of them living with constraints with no money and no people. So they are forced to innovate. We have implemented a lot of programmes with social entrepreneurs.

(This article was published on September 15, 2012)
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I am into SAP CRM for the past 9 years. While reading the article I was turned down to tears on seeing the line "At SAP we are building applications for autistic children to learn better." This is because, my son who is around 14 years is an Autistic child. I will be willing to share my thoughts/feelings/inputs in this arena.

I was actually dreaming of a software product that would cater to the needs of special schools and now SAP has made it a reality. Thanks a lot for SAP's new MD for his innovation towards learning for Autistic children.

Best Regards,

from:  Ramachaqndran R
Posted on: Sep 18, 2012 at 09:58 IST
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