SAP chief says China will remain second home

Updated: 2013-07-19 12:02

By Zhang Yuwei in New York (China Daily)

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SAP chief says China will remain second home

Like many multinational companies, Germany's SAP - the world's largest business software maker - has high expectations for the Chinese market. After doing business for more than two decades in China, the company now calls it a second home.

"It's not just about harvesting growth opportunities, it's also about being part of a great society and being part of its future," Bill McDermott, co-chief executive of SAP, told China Daily.

"China remains our second home, we really believe very, very strongly in China," he added.

SAP landed its first Chinese customer in 1991 and opened its first Chinese office in 1995 in Beijing. It currently operates in 12 Chinese cities, employing about 5,000 and serving some 6,000 customers across the country with 460 partners and about 10,000 certified consultants.

The company's $5.2 billion in revenue for the second quarter was the first time revenues exceeded the $5 billion mark in a second quarter, the company said. China is among SAP's top five revenue generators, along with home base Germany, the UK, US, and France.

The company is betting long on China's growing entrepreneurs and young graduates, who McDermott said "form the backbone of the millennials that will change the world".

"I think China could end up being bigger than everything SAP is in today in a very short period of time," he said. "It could happen very fast."

SAP, whose software helps companies manage supplies, human resources and customer relations, is following China's demographic trend by extending their business from coastal cities to the mid-west parts of the country.

The company is also increasing the pace of its innovation in China. It recently announced SAP New Finance, an all-new end-to-end financial solution tailor-made for the Chinese market.

It's a "big thing" for SAP, McDermott said, because our new initiative is that the company is "innovating in China for China, but also for export to the rest of the world," something he said he has always "dreamed would happen".

"We are optimistic about China, particularly in the second half, because we think there is a lot of pent-up demand there," said McDermott, referring to the recently posted second quarter growth rate of 7.5 percent.

"It is still significantly faster than any place else in the world," he noted.

The company has built a "unique services model" in China, where, it says, it sits on the top of a global expansion map. With research and development led by their local innovation team in China, the New Finance product provides a localized user experience and product functions for Chinese companies, effectively enhancing their financial performance. In particular, it helps Chinese enterprises strengthen internal control and compliance with international standards, which can reduce risk as they venture out into new markets.

China's growing number of entrepreneurs coming out of various industries are a good match for SAP's goal to "make companies run better", said McDermott, adding the company wants to scale its operations to meet the needs of both enterprises and the ecosystem.

The new initiative is also an important achievement for its China Growth Plan - a $2 billion investment through 2015 the company announced in 2011 to develop innovative products including financial solutions targeting the Chinese market.

"We are going to continue to invest," said McDermott, adding the potential China offers not only in growth but also in talent resources is a major driver for the company's focus there.

(China Daily USA 07/19/2013 page10)