China, India, Australia and Singapore among major growth markets for the German software giant

SingaporeGERMAN software major SAP’s Asia-Pacific arm, which does not include Japan, has recorded 501 new customer wins in the mid-market and small and mid-sized businesses segment in the first nine months of SAP’s financial year up to Sept 30. Almost 40 of the new clients were from Singapore, Hans-Peter Klaey, president and CEO of SAP Asia Pacific, told BizIT last week.

Mr Klaey said the company has seen a 4-5 per cent growth in its overall market share in the region in the nine months. ‘That would bring us to over 70 per cent market share compared to our peer group (of) all the major competitors we have in the region,’ he said. He added that on the average the company has been securing around three new customers a day in the mid market and SMB segment in the region. SAP considers companies like PeopleSoft, Oracle, Siebel Systems and Microsoft, among others, as its main competitors.

Mr Klaey told BizIT that the Asia-Pacific region has been growing
continuously for the last eight quarters for the company and ‘each quarter we have gained 1-2 percentage points in market share’.

According to the company’s third-quarter results, announced on Thursday, Asia-Pacific software revenues in the first nine months of this financial year grew 35 per cent to 114 million euros (S$241.1 million) while total revenues (which includes revenues from other sources such as consulting, training and services) grew 18 per cent to 334 million euros.

If these figures were calculated based on constant currency – that is, discounting the spike in the value of the euro – the growth in software revenue was 41 per cent and in total revenue, it was 22 per cent, Mr Klaey said. Overall, Asia-Pacific, excluding Japan, contributed 8.4 per cent to SAP’s total software revenue in the first nine months while its contribution to total revenue was 6.5 per cent.

China, India, Australia and Singapore are among the most important markets for the company in the region. Mr Klaey said SAP has been successful in making inroads into these markets due to a number of factors. ‘We have a best practice approach and specifically tailored solutions for industries which we then sell to customers through 69 channel partners we have in the region.’

The SAP official said the company’s target in the Asia-Pacific region was to grow two times faster than the market, and it was able to do that in the first nine months of this year.

Mr Klaey said SAP was in the process of investing more in the region and had hired 200 people in the first nine months, on top of the 260 it hired last year. These were just the hirings of field employees who worked with customers, and did not include software developers that SAP has hired by the hundreds for its research labs in India and China, he said.

‘If the hirings for the research labs are taken into account in the last 12 months we have hired 1,000 people in the Asia-Pacific,’ Mr Klaey said. Overall, the company has 4,600 people in the region, including Japan.

Apart from being the regional headquarters, Singapore is a shared services centre for the Asia-Pacific region. Some of the processes under the shared services centre include software contracts, administration, human resources and payroll administration. Colin Sampson, senior vice-president and managing director in charge of the Singapore operations said that following the implementation of the shared services centre last year, it is now looking into areas like ‘partner services and licence auditing for the entire region’.

Mr Sampson said 15-20 external customers have approached SAP for
Information on shared services and how they can adapt it for their companies. ‘We have a business consulting group and this group can help other companies implement their shared services,’ Mr Sampson said.