From turning its attention to start-ups and the long tail of fintech to building a robust cloud ecosystem, SAP India is poised to reinvigorate itself in India, targeting mid-market companies and digital native unicorns, according to its Indian leadership
The year 2021 marked the silver jubilee of German IT major SAP’s presence in India. As the company looks to further strengthen its roots in the country, Outlook Business speaks with Kulmeet Bawa, president and managing director, SAP Indian Subcontinent, who talks about the company’s expansion plans in the digital space, its focus areas and more.
Edited excerpts from the interview:
What are SAP’s future plans in India?
We just completed 25 years in India and have grown along with the country. To give you some perspective, eight out of 10 cars or utilities in India have an SAP system. We are present everywhere and have contributed to India’s economic growth. SAP has scaled very quickly and that is what makes me really proud.
Plus, this is a transition time for SAP. We are transitioning into a cloud company and India has been one of the frontrunners in that transition. We are moving people to the cloud. It is a massive expansion opportunity for us because customers are coming to us seeking ubiquity, simplicity and a better commercial payment model. We are trying to give that to them. From a cloud perspective, we are number one in the Asia Pacific and Japan and are one of the fastest-growing (companies) globally. While we are doing well, I keep saying that we have a huge headroom to grow in a country like India.
With most companies switching to a hybrid mode of working, how is SAP dealing with the opening up of the economy and digitalisation?
The last one-and-a-half years have been the fastest-growing ever for us and that is purely digital. I think hybrid is only going to provide a bigger impact because a lot of things are getting solved virtually. For a hybrid work model, we have announced ‘Pledge To Flex’—a trust-based system wherein our employees can work from the location of their choice, put in the number of hours as per their convenience, among other things.
Which growing sector do you think is undergoing a digital transformation in India? Where will SAP’s focus be in the coming years?
In India, we are sector-agnostic as SAP is present in almost every sector here. One of the areas that we are focusing on more, from a horizontal perspective, is mid-market (companies). When you are small, it is important to get your digital core and fundamentals in place. We believe that the Indian mid-market (space) has a lot of scope for improvement.
Our second area of focus in India is the digital-native unicorn space. So, we are investing a lot there because India has the third-largest start-up ecosystem in the world. We have already missed out on a lot of it but now we are going very deep with the venture capital and private equity firms, and their programmes. Through projects such as ‘Nakshatra’, we are providing start-ups with co-innovation opportunities. We also have platforms like SAP.io and SAP Studios for them. Unlike initially, start-ups have become big now and there are special solutions that we have built on special packages for the segment.
Several unicorns have not been performing well of late. Do you feel they are risky to invest in?
I do not think so at all. In India, if you are a tech start-up, you will grow. There may be hitches and glitches, off and on, but it will not hinder growth.
The start-up sector is our focus area not only because of our digital goal but also because we have a lot of other solutions, including customer experience, to offer. Today, everything that you are doing digitally is experience-based and we have a massive line of business around customer experience. Similarly, we have enough (expertise) around human resource transformation through Ariba (SAP’s cloud application). So, we are interested in start-ups in these lines of businesses as well and not just the ones with a digital core.
What are the other sectors that you are planning to venture into?
We are planning an expansion into digital natives, small and medium-sized enterprises, banking, financial services, and insurance, and fintech—the long tail of fintech is what we are focusing on.
We are also interested in the line of business solutions—from human resource transformation, customer experience, procurement to travel and hospitality. There is so much to do. We are sitting in a land of opportunities.