German SAP to Invest in Russian and CIS Markets

Posted by

Sept. 23 – German software developer SAP AG, one of the world’s leading vendors of business management solutions, intends to invest a total of 1 billion euros (US$1.3 billion) in its business in Russia and other CIS countries by 2015, business daily Vedomosti reported, citing President of SAP EMEA Franck Cohen.

The German global software corporation envisages investments in the development of mobile applications, cloud computing, and expansion in the banking and public sector, as well as in the market for small and medium-sized enterprises. SAP aims to double the number of its 700 employees in Russia.

Earlier this month, SAP announced its plans to invest heavily in education to support strategic technology innovation and spur business growth.

This is especially necessary in emerging markets, which are enthusiastic adopters of new technologies as shown by recent sales figures, but typically lack certified consultants in mobile and in-memory technologies.

“There is a disconnect between what SAP needs for its innovation agenda and local consulting services, and there is little point in selling new technology into markets where there are few people with the skills to implement them,” Cohen said to Computer Weekly.

Historically, large systems integrators have invested mainly in Western Europe, but not in emerging markets such as Russia, which is largely responsible for the lack of skills in these areas, he told.

The company currently has 6,500 certified consultants working for the company in the region. In correspondence with its general plan to invest in education, in particular in certified consultants training programm, SAP intends to increase the number of its consultants in Russian and CIS subsidiaries to 20,000 employees by 2015.

In addition, the company plans to create a research and development (R&D) center in the country by no later than 2012, SAP’s regional manager Igor Bogachyov said, adding that the firm is considering the Skolkovo R&D center near Moscow as a possible location.

The company revenue in Russia and the CIS market has increased by 41 percent in 2010. Marina Panchenko, SAP Russia and CIS official, notes that Russia sales accounted for one-fifth of the company’s global revenues and accounted for as much as 85 percent of its regional revenue.

The German software giant aims at revenue of 1 billion euro in the states of the former Soviet Union by 2015, Cohen added.

SAP’s revenue in Russia stood at roughly US$327.95 million or 246.5 million euros last year, while revenue for the whole region totaled to US$385.8 million.

According to IDC data, SAP is holding a leading position in Russia’s software product market, with a market share of 50.5 percent.

SAP AG is the third-largest independent software supplier worldwide and the largest producer of standard enterprise wide business applications for the client-server software market.

Leave a Reply

Your email address will not be published. Required fields are marked *