• August 30, 2007
  • By Colin Beasty, (former) Associate Editor, CRM Magazine

SAP Escalates in India

SAP AG, the world's largest business software maker, has added for only the second time an Indian business process outsourcer to the top level of its business partners. The Indian firm, Wipro, joins a group of global companies that includes IBM, Accenture, and the only other Indian service provider in the club, Tata Consultancy Services. SAP Chief Executive Officer Henning Kagermann introduced Wipro during an event this week in Delhi, India, aimed at boosting SAP's increasing market presence in that country. The partnership will focus on enhancing the development and implementation of best-in-class solutions, especially around enterprise services-oriented architecture (SOA), according to SAP. Wipro was selected based on an SAP-specific set of criteria including capabilities, scope of relationship, and partnership record. As part of the agreement, Wipro will become an SAP global services partner and will establish a solutions lab in Bangalore, India, to showcase the benefits of enterprise SOA, industry best practices, and innovative service-delivery models, according to SAP. Wipro will invest further in joint marketing resources and strategic planning to support growth with SAP and to serve global customers and prospects. The two companies say they will leverage their respective strengths -- combining Wipro's industry expertise and implementation skills with SAP's enterprise applications -- to jointly conduct sales-promotion programs for mutually agreed-upon regional and industry markets. SAP is betting on India and its burgeoning service providers in a big way, and acknowledged that, over the last year, driven primarily by demand from SMBs, it has nearly doubled its Indian customer base, to 2,000. Globally, SAP has said it intends to reach 100,000 customers globally and to invest $1 billion into India by 2010, two goals Kagermann reaffirmed on Tuesday. "The unprecedented growth that we are seeing from India is one of the best examples of how our 2010 strategy translates into action," Kagermann said in a written statement. A major portion of SAP's investment in India is targeted at expanding SAP Labs, the company's global development and services and support hub in India. Following the 1998 launch of SAP Labs in Bangalore, the company opened a center in Gurgaon in 2006, making India the first region in which SAP had development and services and support centers in multiple cities. The Gurgaon center delivers a full set of services across multiple product categories. "SAP Labs India is today the largest research and development hub and support presence for us outside Germany," Kagermann added, in Tuesday's statement. "While the Bangalore center will continue to play a central global leadership role, we now foresee the Gurgaon center focusing on global service and support scaling up significantly in the next few years to enable us to meet our aggressive goals for India." Growth in countries such as India and China will be crucial to SAP's long-term goals, Kagermann said. "Markets like India are at an inflection point when it comes to the adoption of technology by businesses.... [It] took us nine years in India to reach 1,000 customers, and only one [year] to double it," he said. Bill Band, a principal analyst with Forrester Research, sees SAP's focus on SOA and partnership with a new Indian service provider representative of two market trends: "Web services and services-oriented technology are becoming more central in both the users' and vendors' platform architectures," he says. As a result, "the shift to SOA requires new technology skill sets to be applied in new ways, and that's going to drive clients to seek the assistance of CRM professional service providers for help." The global delivery model (GDM) is also becoming a more standard approach for CRM, he says. "Enterprises have watched offshore professional service providers diversify into new areas for years, including application maintenance to leading-edge technology implementations, infrastructure management, and [business process outsourcing]. As GDM has taken hold, buyers are receiving better value for their investment in professional services support and will use even more of these types of resources in the future.," band says. "SAP is simply trying to stay one step ahead of the game." Related articles: Infosys, Tata, and Wipro Top Gartner's Magic Quadrant for Offshore ASPs
The offshore market has reached "a unique point" as service providers continue to perfect the global delivery model and offer more domain expertise. The Age of WIT? Indian consultancies are increasing their pursuit of their Western competitors, and are experiencing similar outsourcing issues. Wipro Makes $600 Million Move for Infocrossing The Asian technology firm's purchase of a U.S.-based outsourcing provider is seen as part of efforts to expand its worldwide presence. On the Scene: SAP Talks Enterprise SOA and Collaboration The business apps juggernaut emphasizes its enterprise services strategy and the significance of co-innovation. SAP Loses Visionary Agassi Over CEO Rift One analyst says that Agassi was "a charismatic and highly visible driving force for change." SAP Sounds Off on SOA and Collaboration The business software giant highlights its enterprise services strategy and champions the importance of business network transformation.
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