India is one of the fastest growing markets for SAP, Europe’s largest technology company by market capitalization. According to SAP’s chief executive in India, cloud revenues are growing by more than 50% annually, thanks to increasing adoption by mid-market companies.“To give you a directional view, our cloud business is currently growing at over 50-60%… because our base is (small and) growing,” Manish Prasad, president and managing director, SAP Indian Subcontinent, told ET.

Last week, the German software company reported a 25% year-on-year increase in its total cloud business for the second quarter ended June, at €4.15 billion (roughly Rs 3,700 crore). Total revenue, including software enterprise solutions, cloud and software business, grew 10% to €8.29 billion (roughly Rs 7,500 crore).

The software maker also said that its cloud backlog revenue stands at €14.8 billion (approximately Rs 13,400 crore), giving an indication of its revenue for the next four quarters.

“Brazil, Canada, Germany, India, Japan and South Korea performed exceptionally well in terms of cloud revenue growth, while China, the US and Saudi Arabia performed particularly strongly,” SAP said in its quarterly statement.

However, India is still a relatively small market for SAP, one of the top 10-15 markets.

In India, SAP is also investing in data centers with a presence in Chennai, Hyderabad, Mumbai and Pune. “Our focus on the adoption and success of our platforms has become core to our game plan,” Prasad said, adding that SAP helps its customers unlock the true value of their investments with its platforms that link them to their business’s key performance indicators.

This has helped accelerate cloud revenue growth from low single-digit percentages to high double-digit percentages, he said.

In India, Prasad said, SAP’s cloud business is growing both through government entities (a huge market that currently accounts for 17-18% share) and through large enterprises and their supporting units.

In addition to the automotive, steel and cement sectors, the company also wants to benefit from the production wave, with an emphasis on medium-sized companies.

Prasad stressed that India’s impact on the global supply chain is unprecedented, saying that about eight out of 10 SAP customers are from the mid-market space. “More than 28% of our business would come primarily from that market from a value standpoint,” he said.

When a large manufacturing organization adopts the cloud, their key suppliers and their customers embrace it, Prasad said. “So the entire value chain is captured and you get into that network economy,” he said.

The global giant has been present in India for 26 years with over 15,000 employees, including its research and development (R&D) centre SAP Labs. It has over 10,600 customers from small and medium enterprises.

Focus on talent

SAP expects to boost cloud growth momentum with its focus on enterprise AI. India has a combination of both technology and talent availability, Prasad said.

SAP India is now focusing on hiring talent from tier 2 and 3 cities such as Baroda, Nagpur, Meerut, Coimbatore and even places in the Northeast where it does business. The company does not share an India-specific breakdown of hiring figures.

SAP said the global restructuring that began in January will affect 9,000 to 10,000 jobs, up from the original estimate of 8,000 jobs.

Without revealing the impact on the India operations, Prasad said there is a need to create quality talent along with quality teachers in AI and it is a “big journey from education to employability”.

According to him, India needs a programmatic approach and a targeted public-private partnership.