SAP eyes SME segment

DHEEKSHA RABINDRA

BANGALORE

FEBRUARY 20, 2007

SAP India, having consolidated its market especially in small and medium
enterprises segment in India in 2006, has announced new initiatives to tap the
huge potential in the SME ERP market in India and globally, as part of its
vision 2010.

As part of its initiatives, SAP is planning to launch an SOA-enabled new
solution in March 2007, to address the lower- and mid-market. Further, it is
planning to invest an additional €300—400 million over eight quarters to
build the new business model, according to Stephen Watts, senior vice president,
SME and Business Development Asia Pacific.

SAP having captured the ERP market in the large enterprise, derives 35 per
cent of its global revenue from the SME segment. Watts said that SAP plans to
tap the €43 billion potential SME market and targets to increase its share of
revenue to 45 percent by 2010.

Deb Deep Sengupta, VP, Mid-market and Channels, SAP, said that the SME
segment is growing at the rate of 12 per cent CARG in India and is expected to
increase to 27 to 30 per cent by 2010. SAP India is targeting to touch its total
customer base to 15,000 in 2010 and out of which 80 percent of the customers
will be from SME segment. The company is also targeting to increase the SME's
revenue share to 60 percent.

SAP India is targeting to increase its number of customers to 15000,
targeting 80 per cent from SME segment by 2010 and to increase SME share of
revenue to 60 percent.

On the niche players in the ERP space, Sengupta said that SAP has an
advantage over others as it is a global player and it offers different solutions
catering to the various needs of the SME segment. He said that the company
always benchmarks its average cost of implementation with the local ERP
competitors.

“The major challenge to SAP India is to cater to the needs of the lower
segment at an affordable price and that can be done," he added.

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