India’s contribution to SAP cloud revenues in APAC doubles in two years: exec

The number of cloud customers doubled in India in the last two years as the company witnessed rapid growth in the mid-market and enterprise segments, said Kulmeet Bawa, managing director and president, India subcontinent for SAP.

“There’s the incumbency piece where existing customers are moving their digital core and ERP systems to the cloud, and as we do that, they are also adding on new solutions as they move,” Bawa said. “In addition to that, India is one of the leading markets in the world, if not number one in terms of adding new customers.”

Globally, 2022 was an inflection point for SAP as it made the transition to a Cloud company after cloud revenues emerged as the largest revenue stream.

India has been among the fastest growing markets for SAP over the last few quarters, and for seven quarters in the APJ region, said Bawa.

“We are seeing accelerated growth across segments, and it’s a very well-balanced growth between mid-market and enterprise customers,” he said. The company is starting to add more customers in tier II and III towns as well as digital-first companies who were not traditional SAP customers.

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While there are concerns around the macroeconomic situation in Europe and North America, the mood is a bit different in India. Customers are cautious about the global environment, but they don’t see any slowing down of demand in India, he added.
This is similar to what several other enterprise technology firms have reported – steady demand and growth in India even as global markets were starting to slow down.

Driving digital and cloud adoption, innovation and focus on mid-market would be the key pillars on which Bawa said he expects the company to grow in 2023.

“We have had massive Cloud adoption in the mid-market, and they are adopting more of our solutions,” he said.

He expects this segment to get bigger in 2023, and it will be a key pillar for the German firm going forward.

India is home to close to 15,000 SAP employees and is the second largest centre for the company, which means much of the technology and intellectual property development is done in India.

The company recently announced its low-code, no-code offering and expects demand for this to grow this year.

Bawa said SAP was also helping customers implement sustainability practices and had set itself a target of net zero emissions by 2023.

“We had earlier set a target of 2025 but some of the learnings over the pandemic have helped us bring this down and we hope to meet the target next year,” he said.