India's significance for SAP's business is massive: Muhammad Alam

He talks about engineering, artificial intelligence (AI) and Indian talent

SAP SE, the international software giant, reported a 25 per cent year-on-year revenue growth in Q3 FY24, driven by robust Cloud services expansion. SAP’s executive and supervisory boards visited India recently for the first time. Muhammad Alam, head of product engineering and a member of the executive board of SAP SE, spoke with Shivani Shinde at the company’s Bengaluru centre about engineering, artificial intelligence (AI) and Indian talent. Edited excerpts:

 

In recent changes, you became part of SAP’s executive board. What has been the impact of these changes to the board?

 

If you look at our transformation to become a Cloud company, we’ve reached a size and scale where it was crucial to have a dedicated board area focused on adoption and customer satisfaction. Previously, this function was part of customer success, which was mainly sales-driven, or product which remains core. It scales up leadership so that the product organisation can focus on product innovation while the go-to-market function falls under our sales leader.

 

On the product side, this structure allows us to accelerate product innovation, especially in the AI age. CIOs (chief investment officers) now have higher expectations. If their needs aren’t met, businesses may do their own thing, often without considering security, governance, or data lineage. So, delivering innovation (along) with these aspects is key.

 

Within the product organisation, we’re also focused on how to scale innovation. For example, we’ve harmonised our structure with a consistent operating model across product management, engineering, and design. Everyone now plans in the same increments, and every six months we reassess our roadmap based on customer feedback. For product engineering KPIs (key performance indicators), we emphasise usage and satisfaction. If those are met, revenue and margin follow.

 

Is this shift driven by AI too?

 

The board change wasn’t solely due to GenAI (generative AI). However, having a dedicated board member allows us to drive AI thinking more effectively. There are multiple facets: Embedding AI into our products, using it internally, and progressing along a maturity curve. The change positions us as a product-led company, prioritising AI in internal and external applications.

 

With AI and Gen AI a lot changes, including how software is developed and consumed

 

It’s multi-faceted. Development, delivery, and consumption are all changing. I just held an ‘ask me anything’ session here for our PE (product engineering) staff, which is one-third of our global team. I got a question “Will jobs be lost?” I don’t think so. But if you can’t use AI in your work, you might not be the right fit.

 

Because of this, India makes up a third of my team…if India’s productivity increases by 10 per cent, we see a 3.5 per cent global lift. This is why programs like the ones led by SAP are critical. Already 50 per cent of employees in India are AI skill ready. This also means a massive part of my team is already using AI.

 

The impact of this is showing, for instance, we have been working on a product, basically re-platforming across a suit of one of our products lines…this has been ongoing for three years, and the completion of this is still two years out of the course. But with all the changes happening we have now progressed…we will actually be done by Q1. Work that took four years is now a three-quarter piece of work.

 

You are visiting India after a decade; what are some of the changes that you see?

 

From a country perspective, it has massively changed. Aadhaar, the payments infrastructure…and how it is empowering women at the grass root level is phenomenal. On the developer side, the stats are clear. India is the second largest base from the AI talent perspective. If you look at the universities here and the talent that comes in from the pipeline is incomparable from any place. In our case, the ability to drive in a location of this large (Bengaluru centre) is pretty phenomenal. The significance of India for us is massive. The incoming flow of talent and the skills Christian (SAP chief executive officer Christian Klein) mentioned, along with the passion and energy here, is a huge advantage.

 

While India is being scouted for AI talent, the fact is also that the employability of engineers in the country is low

 

I acknowledge the concerns. I think we (SAP) sit in a position where we can attract highly employable talent because of our brand and size we have. I feel less worried about that because of our scale, the employee base, and the connections we have. But if I were someone else, I’d probably be more concerned.

 

Also I think the synergy we talked about is very important. The value of AI gets amplified if you can look at it from a suite perspective. That’s what we have, and it’s a unique differentiation for us in India. From an engineering perspective, we literally do every single product here. 

 

The talent from an AI perspective we can get will be disproportionately better than the rest of the market. That’s something we’re really excited about. It’s at the heart of our strategy.