SAP innovates for China - its 'second home'

Having entered China in 1995, SAP AG, the world's largest business software company, now calls the market its second home and is busy innovating there for what the co-CEO says has the potential to become its largest market in the next five years.

Over the past two decades, Germany-based SAP has formed a very specific strategy that is "personalizing everything in China for China", said Bill McDermott, SAP's US-based co-CEO, in an interview with China Daily.

The company is going to announce a special partnership with Chinese software and tech companies such as Lenovo, Huawei and China Telecom, McDermott said.

"We are actually bringing a 'China cloud' to China where now China can consume beautiful software in a very simple, authentic way from the cloud onto the device using SAP Business One, powered by HANA, to small- and medium-sized enterprises. It is an exciting time for SAP and for China," he said.

SAP's HANA (high performance analytic appliance) is an in-memory column-oriented, relational database management system.

With some 33 million users of the cloud (a way of using a network of remote servers hosted on the Internet to store, manage, and process data, instead of a local server or a PC), SAP has the largest subscriber base in the cloud market.

"We didn't sit on our laurels, we went right for the cloud in a big way - it's the fastest growing cloud", said McDermott.

In China, SAP teamed up with Suning, the country's largest appliance retailer, to build a real-time retail system with HANA. After two weeks of implementation, Suning saw performance gains of 10 to 1,000 times.

"That customer-centricity and that service-oriented culture, I feel that in China in a way that I don't feel it anywhere in the world right now," said McDermott, adding the company will continue to focus on improving to meet customers' needs.

"I truly believe, in the next five years, it would not surprise me if it was the No 1 market in the world for SAP," he added.

The world's largest business software firm serves 86 percent of the Fortune Global 500 companies. Talking about the company's global strategy, McDermott said that company is keen on having empathy and understanding for different cultures and different market places.

"It matures you and makes you better if you can really truly have the humility to listen, to learn to talk to people," said McDermott.

China is among the company's top five revenue generators, along with home base Germany, the UK, the US, and France. SAP currently operates in 12 Chinese cities, employing nearly 5,000 people (out of its global workforce of 65,000) with 460 partners and about 10,000 certified consultants.

Among its some 11,000 customers in China, 74 percent are small- and medium-sized enterprises (SMEs).

McDermott said the company will focus on expanding its users among the SMEs. Their goal is to gain at least one million out of the current 40 million SMEs in China in the next few years.

"China is no longer a piece of the Asia business, China is its own structure, its entity within the corporation," he noted.

McDermott, 52, became the co-CEO of the German firm in 2010. The American executive, who also serves on SAP Executive Board, bought his own deli business at 17 and had worked in different functions at Xerox Corp for 17 years before leading the world's software giant.

He said the energy and vibrance that he has seen from the young talent in China echoed his own youth.

"It reminds of me when I was young because I see people that are so ambitious - they have so many dreams and they have such passion and they want to get ahead."

yuweizhang@chinadailyusa.com