SAP expects India growth back on track with 'good pipeline' in 2014

After missing expectations in Q3 due to macroeconomic challenges and the rupee's depreciation, SAP expects its India business to rebound with bright spots in mobile and cloud.
Written by Ryan Huang, Contributor

SAP expects its India growth to be back on track by next year after suffering a disappointing third quarter due to macroeconomic challenges.
While it declined to reveal details on the market, SAP told ZDNet India and Australia were among the underperforming units in Asia-Pacific and Japan (APJ) market for the three months ended September.
The APJ market returned to growth, posting a 1 percent rise in revenue from software and cloud subscription (IFRS) at €198 million (US$270 million). This helped lift overall revenue by two percent on-year to €4 billion (US$5.4 billion), with a net profit of €762 million (US$1.04 billion).

"The currency depreciation negatively affected both our top line and bottom line in Q3 in India," said Steve Watts, president of SAP Asia-Pacific Japan. He added every company in India saw some hesitation and worries among customers, which may have put off IT spending.
Still, he noted India's market potential in the long run was huge, and it remained commited to investing for the long term.

Despite the economic slowdown, SAP India had bright spots in mobile, which posted "triple digit" growth and cloud which saw "quadruple-digit" growth. Watts pointed out SAP was growing cloud subscription revenue faster than most cloud companies in the region and expected the momentum to continue for the long term.

Another positive boost to IT spending could follow the upcoming elections next year. "SAP believes both the current and the upcoming new government are and will work effectively with different parties to stabilize and grow the economy. IT spending will be back to the right growth track and we expect good pipeline in 2014," said Watts.

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