SAP to invest $1 billion in India, Double Workforce

World's largest maker of business-management software, SAP AG unveiled its plan, on Wednesday, to invest about $ 1 billion over the next five years in India.

The plan is a part of a move to expand operations in what its chief executive Henning Kagermann termed one of the firm's most important markets.

German software maker SAP will spend $ 38.4 million (about 30 million euros) on boosting research and development facilities. It is also planning to hire 750 employees to take the total to 3,500 by the end of 2006, from 2,750 now, and double the current number in five years.

Walldorf, Germany-based SAP and its competitors Oracle Corp. and International Business Machines Corp. are expanding in India, magnetized by the availability of technically skilled workers and lower wages. The number of engineering graduates in India is expected to rise 50 percent to 536,000 a year by March 2008.

SAP, which employs more than 34,000 staff globally, has been in India for over a decade, investing $ 500 million, and has more than 1,000 clients in the country. It aims to increase its customer-base to 15,000 by 2010. It has software development centers in Bangalore and Gurgaon, near New Delhi in India.

The Gurgaon office, inaugurated today by Kagermann, will have 250 employees by the end of 2006, the company statement said.

"India continues to grow in its importance to SAP globally," CEO Kagermann told a news conference in New Delhi on Wednesday. "As one of our top eight strategic markets, and now a strategic hub in the region, we are seeing phenomenal growth in demand for our solutions from Indian enterprises."

SAP intends to make India a global strategic hub, with its centers in the country set to contribute 20% of its research by the end of 2006, the company statement said. The Indian software centers are SAP's biggest facility outside Germany. The first software center in Bangalore was initiated in November 1998.

The company has marketed its software to 1,050 customers in India, including 21 of the 30 companies that feature in the Bombay Stock Exchange's Sensitive Index. SAP signed on 200 subscribers in India so far in 2006, which is more than the number it signed on in 2005, the statement said.

Meanwhile, IBM said in June it will triple its investment in India to $ 6 billion by 2009 to provide more consulting and computer services to global subscribers. IBM, the largest foreign employer in India, has 43,000 workers in the country, up almost fivefold from 9,000 at the end of 2003.

Furthermore, Oracle, the world's third-biggest software maker, intends to continue investing in India and add to its 9,500 employees in the country, Derek Williams, chairman of Oracle's Asia operations, said in June.