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SAP to acquire 10 firms in India and China

The world’s largest maker of business-management software, SAP AG, said last Tuesday that India and China will be the key drivers for its global growth in reaching 100,000 clients by 2010.

Henning Kagermann, CEO of Germany-based SAP AG, told reporters in New Delhi that the firm would acquire around 10 companies over the next calendar year to reinforce its position as the market leader. He said SAP had doubled its number of clients in India to 2,000 in the past year and revealed that the company will invest $one billion in the country over the next three years.

“We plan to increase our customer base to 100,000 by 2010 and we will aggressively expand the small and medium-sized customer segment,” Kagermann said. He India and China would play a central role in helping the company achieve its ambitious target. SAP currently has 41,200 clients in more than 120 countries worldwide. “Markets like India are at an inflection point when it comes to the adoption of technology by businesses of all shapes and sizes. For instance, it took us nine years in India to reach the 1,000 customer mark and only one to double it,” he added.

Although the Asia-Pacific region generated merely 13% of SAP’s total revenue in the second quarter to the end of June, the company has rising expectations from the fastgrowing region. Asked about SAP’s acquisition strategy in the backdrop of 10 buy-outs by the company over the past year, Kagermann said one could expect a “similar number” of acquisitions over the next calendar year. “It depends on what we need,” Kagermann said, declining to reveal specific plans. “It depends on whether we get capabilities from such companies to grow faster and consolidate our position as a market leader.”

SAP completed a decade of operations in India this year, where it employs more than 4,200 workers. Deputy CEO Leo Apotheker said the firm was “bullish” on India because it is one of the world’s 10 largest economies and its information technology sector was forecast to generate up to $32 billion by the end of 2007. In August last year, SAP had announced an investment of $one billion in India to expand its operations and double its headcount.

A major portion of SAP’s investment is targeted at expanding the company’s global development and services and support hub in India, SAP Labs. Several software giants including IBM and Oracle have also announced big investments and expanded their operations in the South Asian country, which has a large pool of skilled workers at relatively low wages. (neurope.eu)