In the past 18 months, 44 out of the 108 Indian unicorns, besides many other internet companies, have become SAP India’s clients. Prior to the pandemic, this segment was not a focus area for the German software giant, said Kulmeet Bawa, President and Managing Director (MD) of Indian Subcontinent, adding that the current macro headwinds and inflation are unlikely to impact the company’s growing cloud-focused business in 2023.
At present, almost 80 percent of SAP India’s customers are small- and mid-sized companies (SMEs). The company pivoted from its legacy licensing and enterprise resource planning (ERP)-focused business model to become a cloud technology-focused entity in 2021.
“Until the last 18 months or so we never used to focus on internet companies at SAP. We actually started this and it became one of the big trends in India. During my Adobe days, I used to work a lot with these guys (start-ups). Start-ups used to think SAP is complex. And we wanted to be start-up-like agile, and move fast and we built it ourselves. So, I think it took us about 8-10 months of working with these guys (startups) to change (the) mindset,” Bawa told Moneycontrol on the sidelines of the SAP Now event on April 20.
Bawa took over as the India head in 2020. Prior to this, he was in leadership roles at Resulticks and Adobe.
Some of SAP India’s top start-up customers include Ola Electric, BYJU’s, upGrad, Vahdam Teas, and WayCool, among others. Bawa said that SAP India has already on-boarded 44 Indian unicorns, and wants to sign all the other unicorns soon.
He added that despite the overall slowdown and funding winter in the start-up ecosystem, these digital native companies have continued to remain strong in terms of tech spending and demand.
Cautious demand
India is one of SAP SE’s top 10 revenue generating markets. In calendar year (CY) 2022, the company recorded stellar growth of 33 percent on the back of cloud revenue, as per its earnings filing.
Though not on par with the growth seen in CY 2021 and CY 2022, Bawa remains bullish on continued consistent growth in CY 2023 too.
“There are headwinds and slowdowns because of the macro environment, and growth may not be to the level that we've seen earlier, but there will be growth. And personally, I think in a market like India, there is a need, and customers want to transform. They want to get that data strategy right. Customers across midmarket want to solve it now. It's a question of the way people are starting to look at it,” Bawa said.
He added, “The view that they're taking these days is -- how does my business look in five years from today, because (of) the pace at which a lot of Indian companies are growing.”
SAP in India has over 14,000 customers and 600 partners, including large enterprises. Enterprises like Tata Motors, Dabur, Birlasoft, Asian Paints, and global partners, such as Mahindra & Mahindra (M&M), Wipro, and HCL Technologies are taking their entire SAP landscape to cloud, and also driving digital transformation for SAP’s customers across the globe as partners.
The company, on April 20, launched a new offering, Grow with SAP, for mid-sized customers to provide end-to-end solutions, including cloud computing, ERP and Software-as-a-Service (SaaS), aimed at further strengthening its growth in India and capturing the MSME market early on.
The company said almost 60 percent of India’s GDP touches the SAP system, given its dealings with the MSME sector.
Layoffs and hiring
In February this year, SAP’s global CEO Christian Klein had told The Economic Times, that the company is also planning to double down on investments in India over the next five years in terms of increasing the team size and hiring here.
India is their second-largest research and development (R&D) hub outside Germany.
Recently, the company also made headlines for laying off about 300 employees across its India offices, apart from a lot more in the rest of the world. Meanwhile, it also added around 1,000 employees in mission-critical roles.
Bawa said, “What we were doing was a targeted restructuring. It was not layoffs. The reason was that, as per our strategy, we had x focus areas where we wanted to deep dive into. So, we want to put in more people there and that’s why that hiring. So, those are the areas where we restructured and added some of the existing people.”
“Now, overall, we had about 3,000 people that we let go globally, which was less than 2.5 percent, and it was more of positions getting cancelled and not people. So, it had nothing to do with the individual performance,” he added.
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