SAP CIS revenue grows 32% in 2011, exceeds expectations
MOSCOW. March 1 (Interfax) - Germany's SAP AG, one of the world's leading vendors of business management solutions, saw revenue growth of 32.4% in Russia and the CIS in 2011, the chief executive of SAP CIS, Igor Bogachev told reporters on Wednesday.
He said SAP CIS had the highest revenues among the company's divisions in BRIC countries (Brazil, Russia, India, China) and ranked fourth in the world after the United States, Germany and the UK.
SAP AG closed 2011 with total revenue up 14% to 14.23 billion euros.
SAP does not disclose its revenues in Russia. Market research firm IDC estimates the Russian market for business management systems totaled about $500 million in 2010, and reckons that SAP has a market share of 53.9%.
LLC SAP CIS had revenue of 11.2 billion rubles in 2010, or about 280 million euros at the Central Bank's average annual exchange rate, according to the SPARK database.
SAP CIS planned to grow its business by 25% in 2011, according to an investment program approved at the beginning of last year that targets revenue in the CIS region to grow to 1 billion euros by 2015. The company planned to invest 1 billion euros in its business in Russia and other CIS countries in 2011-2015. Bogachev reckons SAP CIS could achieve the figure of 1 billion euros with annual growth of 25%.
SAP CIS' business grew by 52% last year in process manufacturing, 86% in discrete manufacturing, 40% in the service sector and 370% in the banking sector.
Bogachev said that in the wake of the crisis banks have begun working on increasing the efficiency of their business. SAP, in turn, has begun localizing its banking software solutions, which are used by many of the largest banks in the world, but not at Russian banks. Localization involves adapting the banking software to Russian legislation.
Bogachev also said that, in anticipation of a second wave of the global financial crisis, SAP developed a crisis warning program with 40 scenarios for overcoming signs of a crisis. They call for various measures to increase the efficiency of an organization's core business and reduce costs. The company is prepared to conducts studies of clients free of charge and, with a view to these scenarios and the study results, make recommendations to boards of directors.
Bogachev said SAP CIS has made such proposals to 50 customers, five of which have already received their results and launched corporate efficiency programs.
SAP CIS is also aiming for growth of at least 25% in 2012, including through expansion on the markets for banking and mobile solutions, and development of the SAP ecosystems, which includes a system for training consultants on the implementation of SAP solutions.
Bogachev said 6,000-7,000 such consultants now work in the region, and the company aims to increase their number to 20,000 by 2015. The company invested more than 1 million euros in the development of this training system in the CIS last year, and plans to significantly increase this figure in 2012.
The company will also invest in setting up SAP Lab at the Skolkovo innovation center in Moscow Region. A separate legal entity has already been registered for this laboratory and hiring has begun, Bogachev said.
SAP Lab is expected to have about 70 employees by the end of this year, and 250 by 2015, by which time investment in the lab is projected to total 45 million euros.
The lab will work in four areas: research in the area of business analytics and mobile solutions, providing technical support to start-ups, joint work with the foreign residents of Skolkovo (including Microsoft, Cisco and Intel), and localization of existing SAP products and development of new ones.
The company also expects cloud services to grow in the region. Bogachev said the company is negotiating with telecom and Internet service providers on a possible partnership to provide cloud services using SAP solutions. The company itself does not intend to go into this business.
Bogachev said there is currently no evident growth in the area of cloud services in the region. The services and providers are ready, but customers are not, he said.
SAP has been operating in Russia since 1992, and now has offices in Moscow, Yekaterinburg, St. Petersburg, Novosibirsk and Rostov.