When Waldorf-headquartered business software firm SAP’s India revenue grew at a high double-digit rate in the fourth quarter of the last calendar year, its top management was mildly surprised.
It had come at a time when revenues were slipping in most part of the world.
The company was quick to respond and has since realigned India with Europe, Middle East and Africa (EMEA) markets after breaking it away from Asia Pacific (APAC) region.
Peter Gartenberg, managing director of SAP India, says one of the reasons for hiving off India from APAC was to give it access to the higher resource base that was available for the EMEA customers.
“Today, EMEA contributes 50% of our revenues and so these markets have higher allocation of resources. Looking at the kind of growth that India is witnessing, we do not want it to be limited by resource constraint. This is the reason we have aligned it (India) to EMEA from January 1,” he said.
What this means that SAP India’s revenue would get reported with EMEA.
Besides this minor structural change, India is also finding an important place in the company’s overall business strategy.
After putting a new management in place at the global headquarter, Gartenberge said SAP was now looking at accelerating the pace of market expansion with on-demand or software-as-a-service (SaaS) solutions that will break entry barriers for smaller and medium enterprises (SMEs).
He said 2010 would be a year when the ERP company would speed up delivery to customers and provide them better access through its online and mobile products.
The company has already started acting on it and launched its first on-demand product in India - business intelligence (BI) solution. This product, which is offering from SAP BusinessObjects would be available online on pay-per-use basis.
It was launched globally in 2006 and has a subscriber base of 2.6 lakh. Maneesh Sharma, head business users and platforms of SAP India, said the first edition of the on-demand BI solution tools would be free up to 10 MB data usage. After it is priced at Euro 22 per use and Euro 65 per use depending on BI analytical tools customers opt for.
Gartenberg said the new offering in India would accelerate the pace of adoption among clients hesitant to make capital investment on creating infrastructure for BI services.
“This would give them low cost entry into the BI area,” he said.
Bhavish Sood, principal analyst for software market - Gartner India, said he did not see pure-play vendors in the SaaS BI product market. It would constitute of service providers that would have several other offering along with on-demand BI solution.
“The race will be won by vendors, who will package IPs into their SaaS solutions,” he said.
Today, information technology (IT) services firms like Infosys, Patni and L&T already have SaaS analytic products.
SAP’s rival Oracle does not have online BI product but third party vendors host their solutions on their cloud infrastructure. It’s SaaS BI is pitted against IBM’s Cognos.