SAP India posts 43% growth in revenue

T.E. Raja Simhan Chennai | Updated on April 01, 2011 Published on April 01, 2011

SAP India Pvt Ltd, a 100 per cent subsidiary of SAP AG Germany, has reported a 43 per cent growth in revenue of €257 million ( Rs 1,600 crore) in the calendar year 2010 against €180 million in the previous year, according to the company's annual reports.

Started in 1996, SAP India is one of the fastest growing companies within SAP worldwide with 5,220 employees (both sales and research and development put together) and over 4,600 customers such as Tata Motors Ltd, Mahindra & Mahindra, Essar Steel Ltd, Sesa Goa Ltd and Rashtriya Ispat Nigam Ltd.

SAP India did not comment on the numbers stating it was in a quiet period before the first quarter results.

According to Mr Sunil Padmanabh, Research Director, Gartner, a global research firm, said SAP continues to be a leader in the Indian enterprise application software. ‘They have 40-50 per cent market share in this segment and have been continuously performing well. SAP has been well received by Indian customers,” he said.

However, going forward, Mr Padmanabh feels SAP could have challenges from domestic companies such as the Chennai-based Ramco Systems Ltd in tapping the ‘India localisation' ERP market that deals with India-specific legal and statutory requirements. Localisation solutions address requirements related to sales tax, value-added tax, central excise tax, customs taxes, payroll tax and income tax.

Most global and local ERP vendors have their own respective India localisation solutions and modules. Typically, the average cost of an India localisation effort across a wide range of end users ranges from 10 per cent to 15 per cent of the overall configuration/customisation effort, he said.

Global Research

The development centres of SAP (SAP Labs) are distributed worldwide. The largest of these SAP Labs is in Walldorf, Germany, followed by Bangalore; Palo Alto, California (US); Shanghai, China; and Vancouver, Canada. All labs deploy a common framework of development standards and key performance indicators.

According to the 2010 annual report of SAP, the SAP India Labs employed 4,082 people. “The depth of industries that SAP has is unparallel. The labs are only cost centres and develop localised research,” said Mr Padmanabh.

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Published on April 01, 2011
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