SAP Eyes Buys In Indian Mobile, Traditional Software Cos

Despite slowdown tremors shaking up the global IT sector, India still seems to be holding its ground. And this is making world’s largest maker of business management software—SAP, take a bullish stand on the country. Speaking exclusively to CNBC-TV18’s Kritika Saxena, SAP global co-chief executive officer Jim Hagemann Snabe, said SAP India was in fact looking at expanding.

He remains optimistic about the deal pipeline and doesn’t see budget cuts yet. “We seek to reach global revenue of USD 27.2 billion by 2015,” he tells CNBC-TV18. However, he is worried that the Southern Europe situation may play spoilsport. “We need strong Euro to stabilise growth,” he says.
On the company’s India plans, Snabe points out that the country’s software revenues grew 80% in the first half of 2011. “We were originally very successful in manufacturing and we continue to be strong in that front. But in the last few quarters we have seen a very strong uptake in service industries (in banking for instance) and in public sectors,” he points out.

The company plans to rapidly hike the head count from the current 6,000. “We are expanding our campus in Bangalore, Gurgaon and New Delhi,” Snabe says.

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On the acquisition front SAP will explore buying options within India focusing on mobile software and traditional software companies, Snabe says. “We also seek to expand in the telecom place here along with expanding existing partnership with vendors. Currently, we are in partnership with TCS, HCL, Wipro and Infosys. We are looking at creating an ecosystem with medium-sized IT players,” he adds.

_Below is the edited transcript of the interview.
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S&P’s had downgraded the US markets, after which we saw IT stocks all over the world tumbling. How significant is this for the IT companies? Are we actually going to see budget cuts?

I have visited lots of clients; my partner Bill McDermott does the same. We have both seen all change fundamentally in the investment appetite for technology.

What about pricing, is it stable?

It’s stable.

What is the most worrying market right now, US or Europe?

It’s hard to say. Americans have always been more optimistic and very technology driven. I think the Southern Europe situation around Greece etc where interest rates now going up to 100% and uncertainty about the Euro is not good for Europe.