The new round of investment marks a major commitment, dwarfing the $500m the company has invested since 1996. Most of it will go on R&D and hiring engineers. An extra 750 staff will be added to the Indian roster by the end of the year. SAP currently has 2,800 people working at its R&D facility in Bangalore.
There are also plans to build a new global service support center in Gurgaon and an outsourcing hub near New Delhi. The investment is expected to help grow sales within the Indian market. The current count of 1,050 Indian customers is expected to rise to 15,000 by 2010 and will contribute to SAP’s stated goal of increasing its global customer base from 30,000 to 100,000 by 2010.
In the AsiaPac region as a whole, the company aims to triple its SME customer base to 9,600 by 2010.
AsiaPac is an important market for SAP and combines two growth trends. As a region it is a growth area, and it is also predominantly mid-market region. SAP has identified the mid-market as playing a key role in achieving its 2010 customer target. Currently 30% of its global revenue comes from that market segment. By 2010 it expects 40% to 45% of order entry to come from the mid-market.
There is headroom for growth. Software revenue from the region increased by 5% in the first half of fiscal 2006 compared to the previous year, reaching 159m euros ($203m), with good growth in India and China. AsiaPac still represents the smallest part of the business. During the same half-year period, software revenue in the Americas was 465m euros ($594m), and 525m euros ($670m) in EMEA.
