Enterprise solutions company SAP recently announced plans to expand its operations in the Asia Pacific region by opening a new innovation centre in Singapore by the year-end. The NYSE-listed company has seen 10 per cent growth in software and software-related services revenue in Asia Pacific Japan in the September quarter. The company is optimistic about growth prospects in the region, especially in India. In an interview with BusinessLine, Scott Russel, COO, SAP Asia Pacific Japan, talks about the company’s enterprise solutions and its widening marketplace in India. Edited excerpts:

Tell us a little bit about SAP’s India operations…

We operate across several industries in India. We need to make sure that we can support the top end, or the big enterprises that operate within India and the scale they provide and the scale in terms of users, volumes, expectations, etc. Also in India, we have a very vibrant small and medium market, an entrepreneurial marketplace and a lot of innovations. So, India is probably one of the markets where we see the real distinction between big companies and a large volume of small enterprises. What that means for us is to make sure that we got solutions that are relevant for all market categories. The second point I would like to make about our India business is that the adoption to the cloud and the environment and strategy of SAP HANA running on cloud have been really aggressive (HANA or High-Performance Analytic Appliance is a database management system developed by SAP).

SAP’s cloud entry has actually intensified competition in the sector. Other companies, including Microsoft, are also steadily expanding their cloud business. How do you see the picture?

Look, one of the challenges of cloud is that it gets generalised a little bit. What I mean by that is we are talking about software services, a private cloud environment. In my point of view, we are going to see a very competitive market. But we are uniquely placed to address the broader cloud marketplace, be it procurement solutions, finance solutions or industry solutions available on the cloud. We have been competitive in each of those unique categories. You can get best solutions from SAP for these categories.

How do SAP solutions help a banking or insurance company?

There are a number of solutions. In the insurance sector, for example, we have got nearly 90 per cent of our solutions already ready on our cloud platform. We have got solutions for the core banking, core insurance, billing or the operations of the back-office. We have also got solutions in the front as well. For example, mobile banking. If you look at a market like India, there’s demand for mobile banking. Our mobile banking solutions help a financial institution reach out to its customers in a manner that’s convenient for them.

The other perspective is solutions which are very unique. One of the examples is fraud management. We have got solutions that help financial institutions, particularly banks and insurance companies, manage their liquidity levels. In SAP HANA, real-time analyses of liquidity levels actually help businesses. What’s the advantage to banks? Number one, it captures and analyses fraud, money laundering or any such activities much faster — because it’s real-time analysis. Number two, they can look at the liquidity levels and then credit risk levels, and determine the available cash for the short term in the financial market.

There’s a new Government in India, which seems to be determined to go ahead with financial and economic reforms. One of the agendas is raising the foreign direct investment cap in insurance. How do you look at it? Do you think liberalising the insurance sector further will offer more business opportunities for SAP?

We do. One of the things we found in our history is that companies win if there are economic reforms; government reforms that drive not only regulations but also the expansion of an industry to meet the needs of the citizens and also the marketplace. We are very excited about the market the new government is providing. We provide our solutions for the local needs of the marketplace. And we are really excited about it.

Some 80 per cent of SAP’s India clients are small and medium enterprises. That’s really surprising...

But if you look at the market we operate in, there are large companies at the top of the pyramid, the mid-market and, of course, the SMEs at the base. Typically, the distribution in other markets such as the US, Japan, Australia and Singapore is largely even. In India, we are fantastic in the base, where we have got around 80 per cent of our clients. Why? Two reasons: one, we are a large provider of solutions both for big corporations and the SME market. Two, these companies, particularly in India, are very fast in moving from a small enterprise to a large enterprise.

There’s no market that’s more exciting than India. We see ourselves as part of their growth.

Do you have any specific future growth plan for India?

We do. First of all, we focus on software and the cloud marketplace. Industry analysts predict a significant market in India. We are investing in our R&D operations as well as localising solutions for India. It’s also one of the markets where we will launch products because of the entrepreneurial nature of the marketplace. India is well-recognised for SAP. It’s fast to adopt to new solutions and it’s happy to be a market leader rather than being a follower.

The writer was in Singapore at the invitation of SAP

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