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40% Of SAP's Innovations Come From India

By Ayushman Baruah
July 05, 2023 11:26 IST
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'We aim at establishing India as an early talent hub on a global scale and are actively recruiting professionals in areas like cybersecurity, machine learning, data science, and other relevant fields.'

IMAGE: Kindly note the image has been posted only for representational purposes. Photograph: Kind courtesy Tumisu/

German technology major SAP is seeing significant growth in its Cloud business in India, driven by an uptick in digital transformation, especially in the mid-market segment, says Rahul Baheti, chief operating officer, SAP Indian Subcontinent.

In an interview with Ayushman Baruah/Business Standard in Bengaluru, Baheti talks about the India opportunity, research and development efforts, and the Cloud business.

What is the opportunity in India for SAP, especially in Cloud?

In the past two/three years, India has seen some significant Cloud adoption around the world. According to the International Data Corporation, this growth will only gain momentum as the overall Indian public Cloud services market is expected to reach $10.8 billion by 2025, growing at a compound annual growth rate of 24.1 per cent for 2020-2025.

As customers from industries, such as engineering, construction, life sciences, pharmaceutical, consumer packaged goods-retail, and Information technology/IT-enabled services, accelerate their Cloud migration, we are seeing a big opportunity.

India remains a crucial market for SAP.

As more and more companies realise how important technology integration is to value realisation, many opportunities have opened up for us in the areas of Cloud, R&D, innovation and start-ups, and sustainability.

What is your India unit's R&D contribution to SAP globally?

India is our largest R&D hub outside of Germany and handles a larger part of our product portfolio.

Nearly 40 per cent of SAP's R&D innovations come from India.

We will continue to double down on our investments in this area and develop end-to-end core products from here.

We have already started building our second office in Bengaluru, which will span 41 acres and add 15,000 new jobs.

What is driving the growth of Cloud business in India?

Multinational corporations today are looking to move parts of their businesses to India as they look to derisk and de-concentrate their supply chains and logistics from one region to 'safer, stable environments' such as India -- all powered by Cloud.

Businesses are embracing Cloud-driven services and solutions to satisfy business and consumer expectations because of the nation's digital transformation.

Large businesses, including Air India, Apollo Tyres, Mahindra Group, Tata Motors, Dabur, Asian Paints, and others, have switched to SAP Cloud in recent years.

Sector-wise, we are seeing expansion across all industries, with mid-market businesses in tier II and III locations showing particularly high demand.

Due to a boom in investment inflows, digital natives and unicorns have had great success with SAP-led digital transformations.

We also see a ton of potential for Cloud computing in India's public and government sectors.

What is your strategy to achieve your growth targets for the Indian market?

We have been off to a good start this year, as our global earnings have shown.

We are in a powerful new phase in our strategic transformation from being an on-premises company to a global Cloud company.

We have accelerated our top-line growth to double-digit growth.

We have laid solid groundwork for our full-year outlook, thereby pivoting back to profitable growth in 2023.

India is no different, and we are following a similar growth trajectory.

Looking at its high growth spurred by the domestic market and government-led initiatives around Digital India and Make in India, we are very excited by the opportunities.

We aim at establishing India as an early talent hub on a global scale and are actively recruiting professionals in areas like cybersecurity, machine learning, data science, and other relevant fields. For this, we plan on hiring at least 1,000 new employees in India, including at SAP Labs.

Feature Presentation: Ashish Narsale/

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