SAP Reinforces Commitment to India

Phase III of India Development Center Gets EUR 20 Million And Increases Head Count to 3,000 by 2006

BANGALORE, INDIASAP AG (NYSE: SAP), the world’s leading provider of business software solutions, today reinforced its commitment to India with Mr. Henning Kagermann’s second visit to the country in a year. Mr. Kagermann reinforced the importance of India as a key growth market and strategic development center for SAP.

“India has taken its place as a major force from a regional and global perspective. SAP’s performance in India has been most successful and it is clearly among the top three emerging markets globally for SAP,” said Mr. Henning Kagermann, CEO, SAP AG.

“Today, to remain competitive and grow, innovation is essential. India has been at the forefront of setting benchmarks in the industry with world-class IT development and an impressive talent pool. As a testament to this, we are pleased to further commit an investment of EUR 20 million towards the third phase of our development center in India. SAP Labs India continues to be the largest development hub for SAP outside of Germany,” added Mr. Kagermann.

Substantial Investment in SAP Labs India
SAP Labs India, the development arm of SAP AG, is investing an additional EUR 20 million to develop the third phase of its India development center at Whitefield, Bangalore.

Spread over a 21-acre campus, the new phase will house over 1,500 developers. Holding the record for being the largest facility of SAP outside Germany, SAP Labs India currently employs 1,100 developers and plans to increase the head count to 1,500 by the end of 2004. Subsequently, the software major plans to further increase this headcount to 3,000 by 2006.

SAP Labs’ main focus will be devoted to global research and development for products and services to SAP customers in India and other markets worldwide.

“With the successful completion of many product initiatives, SAP Labs India has now emerged as a strategic development center for SAP globally. Today, the Business Solutions Groups at the Lab contributes substantially to SAP’s high-end product development and technology development initiatives including mySAP suite of solutions, SAP NetWeaver, Application Platforms, Architectures and Mobile Business Solutions,” said Mr. Peter Zencke, Member of The Executive Board, SAP AG.

SAP Builds Further Momentum in 2004
In 2004, SAP India has been strongly building on the momentum it gained in 2003. Today, SAP India has over 650 customers and more than 1,000 installations in the country. The company has put together an accelerated growth plan that will enable it to strengthen its leadership position in India.

Elaborating on SAP’s accelerated growth plan for India, Mr. Alan Sedghi, President and Managing Director, SAP India said, “The accelerated growth plan will focus on further and deeper reach into virtually all industries and geographies, including a major focus on small and medium businesses (SMBs). We will achieve this through our principles of Customer First, Partnerships Matter, and Excellence in Execution. We are confident that with this strategy we will be able to grow our business at least 1.5 to two times the industry.”

SAP’s breakthrough wins in India include Tata Steel, JetAirways, Tata Motors, Ranbaxy Laboratories Ltd, Tata Finance, Rane Group and Tata Teleservices. Some other significant wins in 2004 include Videsh Sanchar Nigam Ltd., Phillips Carbon, Hindustan Zinc Ltd., John Keells and Honda Motors.

SAP’s clientele in India include seven of the 10 most capitalized companies in the country, four of the five oil and gas companies, six of 10 largest pharmaceutical companies, six of 10 largest steel and metal companies, six of 10 largest information technology companies, four of the five large two wheeler manufacturers, two of the largest newspapers and some of the largest engineering companies.

SAP has also strengthened its presence in the Indian subcontinent, making significant wins in Sri Lanka, Bangladesh and Nepal.

SAP recognizes the importance of delivering and supporting integrated end-to-end solutions that provide value to customers. SAP has been helping companies unlock the full potential of its solutions through its strong partner network. Today SAP partners with the best-in-class companies worldwide. In recognition of the profile and maturity of the large Indian services companies, SAP is in discussion with a number of them to identify opportunities to partner globally.

Leadership in the SMB Market

With more than 250 SMB customers, SAP is the market leader in the segment. In the first half of 2004, SAP acquired more than 30 new SMB customers. Some of SAP’s recent wins in the SMB segment include Network Clothing, Glass Equipment, Zandu Pharma, Strides Acrolabs, Gupta Synthetics, Goetze, Mawana Sugar, Yamuna Rollings and Flour Mills.

SAP is addressing the SMB opportunity actively through partners and value-added resellers. The organization is working with an elite group of partners with domain expertise that provide marketing, implementation and services behind SAP’s SMB offerings. SAP has developed individualized, two-tiered SMB solutions – mySAP™ All-in-One and SAP Business One® – which are scalable, offer ROI at a reasonable cost and have integration capabilities.