SAP says emerging markets stabilising

German software giant SAP is seeing a stabilisation of demand in emerging markets, including China and India, as its deal pipeline improves and companies loosen their purse strings for IT spending.

"We are absolutely seeing a level of stabilisation in markets across Asia," said Stephen Watts, chief operating officer of SAP Asia Pacific Japan, at the Reuters India Investment Summit.

SAP shares edged up 1% Wednesday on the Frankfurt Stock Exchange. US-listed shares of the company were up 2% in trading before the bell.

In October, the company cut its sales outlook on weakness in emerging markets and Japan, and said the spending environment remained challenging.

SAP, whose customers tightened budgets during the economic downturn, is now seeing an improvement in the spending environment.

"We saw liquidity challenges in the last four quarters when people held their cash," Watts said. "I am seeing spending come back."

SAP, which had focused on large customers for contracts in the past, is increasingly turning towards small and mid-sized firms.

The company, founded by five former International Business Machines employees in 1972, boasts McDonald's, Pepsi, Audi, Apple and GE as customers.

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