SAP open to acquisitions in Asia, to hire more in China, India

Germany’s SAP AG, the world’s biggest maker of business software, is open to acquisitions in Asia and plans to hire more in the fast-growing China and India markets, a senior executive said on Monday.

While there was limited impact from the economic woes in the United States and Europe, SAP expected Asia to contribute more to overall revenue in coming quarters, said Stephen Watts, president of SAP Asia-Pacific and Japan, at the Reuters China Investment Summit.

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“In your question are we open to acquisitions in Asia? Yes we are,” Watts told Reuters in Hong Kong. “We are most certainly open to acquisitions, but it has to bring incremental innovation to the customer. That is the first absolute go, no-go.”

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SAP, which competes with Oracle Corp globally and companies such as Kingdee International Software Group Co Ltd in China, has made key global acquisitions over the past few years, including Sybase and Business Objects.

SAP last month reported a jump in third-quarter sales and profit, alleviating fears of a slowdown in technology spending.

Asia has been a bright spot for SAP, whose portfolio includes designing software, databases and workflows for corporations.

In the third quarter, SAP’s revenue in Asia-Pacific and Japan totalled 525 million euros, contributing about 15 percent to the company’s total.

Software revenue in the region was up 42 percent at 165 million euros, with Japan, China and India growing the fastest, in excess of 50 percent during that period, Watts said.

“Asia will absolutely form a greater part of the pie as the quarters and years progress, but I don’t think that’s as a result of the rest of the pie getting smaller,” said Watts, who assumed his position in January 2010.

In India and China, SAP had a staff strength of 5,500 and 2,600, respectively, at the end of the second quarter and had added a couple of hundred more in each market over the past few months, Watts said.

SAP has also recently moved from Germany its global support organisation now headquartered to Beijing. “It will continue to be hundreds of people,” Watts said, declining to give specifics.

Reuters