SAP AG plans to invest $1 bn in India by ‘10
Henning Kagermann, Chairman and CEO, SAP said that SAP AG plans to invest $1 billion in India over the next five years, to expand its research facilities and tap more Indian customers. The German business software major SAP AG said that it will remain invested in Indian even it the labour cost go up.
Mr.Kagermann said that they were not in India because of the cheap labour but for high quality of workforce. He said that they would remain in India even if the labour cost goes up. Mr.Kagermann is in India to participate in the first-ever executive board meeting of the company in the country.
Last year Mr.Kagermann was quoted by German edition of the Financial Times as saying theat rising labour costs in India were forcing him to start looking to other countries. Mr.Kagermann had said that India is slowly getting expensive. He said that they have decided to hire a certain number there, and then start looking at other locations.
In India there are a concerns that as the labour costs go up, companies in US and Europe will start looking towards countries like the Philippines that are offering low cost labour. Mr.Kagermann said that SAP AG is committed to invest $1 billion in India by 2010. A major portion of the investment is targeted at expanding the company’s global development, service and support hub in India, SAP’s Labs.
SAP’s Labs two centres in Bangalore and Gurgaon are the company’s second largest research and development facilities after Germany. SAP AG right now has 4235 employees in India out of which 3500 are working in SAP Labs.
Mr.Kagermann said that the It sector in India is estimated to be around $27-32 billion by 2010. Mr.Kagermann this was the is a significant reason for them to be present there. The company has doubled its customer base to 2000 in India in one year.
