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India key growth driver amid strong demand for cloud services

India is an “innovation engine” for the world and a key driver of growth for SAP, said a top executive at the German technology major, with business expanding rapidly on the back of strong demand for cloud-based services. The enterprise software maker clocked triple digit growth in India for three of four quarters in 2021.

Terming India “one of the fastest growing markets (for SAP) in enterprise and mid-market segment,” Scott Russell, executive board member, customer success, said in an exclusive interview with ET, “(Indian firms) are trying to expand their business in other parts of the world, and we are able to get the benefit of that.”

Strong Momentum
Last year, SAP announced that it would invest up to $500 million toward growing its India business, buoyed by the “global reach” of companies as “the momentum remains strong in the Indian market.”

“With large companies like Asian Paints and Tata Motors moving to the cloud, it lets us showcase use of technology and drive a strong narrative.”

This is “not only for cloud, but also transformation and agility,” said Russell.

Headquartered in Walldorf, Germany, the company is also increasing its dependence on its innovation labs located in India to fuel the next stage of growth. This work draws heavily from relationships with local startups and the digital native community fostered by SAP Labs in India. This is helping catalyse growth — not just locally, but across global markets as well.

The company expects to double its India headcount by 2025, from 14,000 at present. The centre is the largest development hub for SAP, outside of Germany.

In 2020, SAP announced a pivot to a cloud-led business. Russel said that business, built from scratch, has now grown to $12 billion and is clocking a growth upwards of 24%. Over the last two years, the spike in demand for digital transformation, fuelled by the Covid-19 pandemic, has contributed to this uptick.

With geopolitical uncertainty looming large over enterprises worldwide, Russell said having a cloud-based approach shields the company from being overly impacted. “There are some factors that are now very relevant, like data sovereignty and data privacy, as well as the shift in supply chains, “with companies going from ‘just in time’ to ‘just in case,’ and also managing their boundaries and working with multiple suppliers,” he said.

Talent Advantage
The availability of talent, a highly educated workforce and the culture of innovation and risk taking, places Indian businesses on a strong wicket, noted the executive.

“I would argue it (the talent crisis) is an opportunity for Indian companies… if they could draw in and retain that talent, with several global economies dealing with an aging population, this could be a differentiator for India,” said Russell.

He said some of the new demand for automation was coming from the shift in business models — with companies wanting to increasingly simplify structures and free up talent that was doing operational tasks.

SAP is also seeing increased demand for environmental, social, and governance (ESG) products, as companies the world over focus more on how to manage their carbon footprint. This is trickling down to downstream suppliers. In India too, demand for sustainable solutions is increasing, in part because it’s a part of globally connected value chains, Russell noted. Hostingsignal

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