SAP to invest $2B in China expansion

Investment aimed at growing German software maker's market presence in China where SAP plans to double its offices and workforce.
Written by Jamie Yap, Contributor

German enterprise software maker, SAP, has unveiled plans to invest over US$2 billion through to 2015 to increase its presence and grow its business in China, where it will double its operations and workforce.

Its expansion efforts will see approximately 2,000 new hires and five to six new offices across China, SAP said in a statement Tuesday. The company currently has a headcount of 2,500 in five offices in the country.

The announcement came during SAP's Sapphire conference in Beijing for its Chinese partners and customers, where the software maker noted that growing its business in the local Asian nation would require a significant increase in market presence.

"We have successfully grown our business in China over the past 20 years and now want to scale our operations to fully meet the needs of both enterprises and our ecosystem," said Bill McDermott, co-CEO of SAP.

The investment will also focus on creating software that will be tailored to meet the country's requirements, as well as growing the IT ecosystem to meet customer needs, the German company said.

China is the most important market for SAP's wider Asia-Pacific strategy, CTO Vishal Sikka said in an interview with Bloomberg Tuesday.

The report added that the Chinese expansion is part of SAP's plan to boost its revenue share in emerging markets and increase global sales by 60 percent by 2015. It also noted that China's government in October announced tax and financing measures to help small companies, which are potential customers for SAP's Business One software.

Thomas Otter, vice president at Gartner, added in the Bloomberg report that China is a "very significant market" for SAP and products such as mobile applications and Web-based tools will be key for SAP's long-term growth in emerging markets.

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