Sentiment is pretty positive in India now: Deb Deep Sengupta

Interview with MD for Indian subcontinent, SAP

German enterprise software firm SAP believes the next phase of growth in India would come from small & medium enterprises (SMEs). Deb Deep Sengupta, managing director for Indian subcontinent at SAP, tells Karan Choudhury how the company is expecting to see significant traction from tier-II and tier-III cities, and is thus planning to open offices in cities such as Coimbatore and Dehradun. Edited excerpts:

SMEs have traditionally been your largest customer base in India. With so much of action happening in the start-up space, how is that resonating in the overall demand environment for SAP?

Most of our customers in India are SMEs and start-ups. Around 80 per cent of our customers are SMEs; we work with customers who have annual turnover of less than Rs 1 crore. With the increasing adoption of cloud computing, affordability is not the challenge today. SME is a segment which will give us the highest growth and edge over competition. We also help start-ups incubate their business through SAP Ventures. We have invested in NewGen, Just Dial, iYogi and Connectiva. Roughly 20 per cent of the SAP Ventures’ $355-million fund would be invested in India by the end of the fund’s life.

How is SAP dealing with increasing competition from players such as Oracle and Microsoft?

We are the No.2 cloud company in the world, and we’re growing at triple digits. We are different because we’re taking our normal platform, retooling it and taking it to cloud. We are seeing a lot of traction both in India and overseas, and we continue to see this trend over the next couple of years. We work across 160 geographies. So the challenges we face in India are of the same kind as they are in other countries.

Have programmes such as Digital India opened up newer opportunities for SAP?

The government sector is one of our biggest focus areas. We are working with Indian army and navy, postal services, railways, utility segment, and a lot many municipal corporations. Unlike other technology companies, we have a sharp industry focus.

There is a varying degree of maturity and adoption level globally. And as far as India is concerned, the trend and sentiment are pretty positive. A few years ago, there was absolutely no decision making happening. But today, a lot of projects and initiatives are on the cards. Coming to Digital India and Make in India initiatives, with the infrastructure coming in, we will see a lot more companies would leverage and offer products that could be consumed digitally.

How is cloud disrupting the Indian market?

It is disrupting every segment, whether it is consumer, retail, aviation or travel industry. Digital provides the opportunity not just to automate but to re-imagine the business. That is where we play a significant role in terms of advising customers, which technology to use. There are 28 industry segments on which we focus on.

We have a digital transformation roadmap for each of these segments. We call it Industry 4.0, which is basically the next generation of industry model.

What is your India expansion plan?

We have been expanding significantly in India. We have around 8,000 people working in the country with huge centres in Bengaluru and Gurgaon. We are expanding our facilities in Bengaluru.

As far as investments are concerned, in 2005 we pledged $1-bn investment in the country and that has been utilised. At present, we have eight offices in India and we have plans to open centres in Coimbatore and Dehra Dun, among others.