SAP, the $20-billion German enterprise software maker is betting high on India. The company is planning to invest in start-up and provide its SAP HANA platform for flood management. In an interaction with Mohd Ujaley, Bernd Leukert, Member of the Executive Board of SAP SE, Products & Innovation says, “India is better placed than other BRIC nations for driving the new wave of business innovation which can translate data into new service opportunity with the help of next generation software.”
Edited Excerpts:
With companies like SAP working to develop a new line of innovative solutions, can we expect a decisive change in the business environment?
Earlier business and technology were two separate areas for the organisation, but that trend is now fading. Technology is now an inextricable part of the system, which enables different organs of the business to come together for ensuring productivity and efficiency. The next wave of business innovation is only possible through partnership and collaboration. We have the competency and technology to drive this—we have the platform that can translate big data into smart data. We have a mobile platform that not only focuses on application, it also takes care of security. But enabling business with better infrastructure is not enough, the platforms must also drive the business. As a technology company, we can’t accomplish this on our own. When it comes to business innovation, you need to engage with the leaders in retail, manufacturing, healthcare, PSU, government, etc.
Where do you see India when it comes to partnership and new wave of business innovation that is translating data into services opportunity?
India is better placed than other BRIC nations for driving the new wave of business innovation, which can translate raw data into critical information. Brazil, Russia and China are mired with situational issues. There is unfavourable political situation in Russia; Latin America is going through difficult economic environment; China is not having the same growth rate as they had 2-3 years ago. However, in India, since the new government took over, we see a rise in optimism. The country has outlined the digital programme for delivery of services to the citizens. Government support and stakeholders engagement is key for converting the data into a new service opportunity. India with its conducive economic, political and pro-digital environment provides all that is needed to make it happen. A new company may take some time, but we already have the competency, capacity and maturity to help the government of India.
SAP is providing its SAP HANA platform for flood management in India. What is the stage of the project?
The solution is the outcome of a co-development between SAP and Bangalore based Arteria Technologies. Currently it is in pilot stage with the government of Uttar Pradesh. The idea is to equip canals and the dams with sensors so that whenever there is overflow, leakage and risk of flood, people can be alerted. In the second phase, we plan to build an auto-monitor tool to fix small problems automatically.
There is growth in the adoption of platform as a service and software as a service through cloud. Some of your competitors have substantially raised their footprint in this segment. How is SAP addressing the new trend?
In terms of users, we are the biggest cloud company in the world. By revenue, we are the second biggest. You are absolutely right in saying online slots that the revenue coming from on premise solution is higher than that from the cloud. However, going forward, we see higher growth from cloud. We believe that by 2017-18, the revenue from cloud will come to parity with our on premise solutions and thereafter cloud will take the lead. However, this does not mean that companies will immediately bring their modules and processes into the cloud. You may see companies first putting HR and talent management to the cloud and then there could be gradual move to put sales, marketing and other parts of business. In eCommerce vertical, there is strong trend that companies want to build relationship with their consumers on the all the platforms. They want to provide the facility for flexible interactions to the customer. In all these facilities, cloud can play a critical role.
Do you find any different pattern when it comes to adoption of cloud based solutions by the governments across the globe?
In government, the pace of cloud deployment will essentially depend on the government policies. We consider public sector units to be a huge opportunity for us. In government, you may not see that they opt for cloud based solution for financial application, but there could be significant adoption of cloud services for government service delivery to the people. In some countries, districts have their own IT system. The government spends huge amount of money on the operation and security of silos IT system. In my opinion, the more better proposition would be to have an integrated big data center run by government—this data centre may function like a government cloud and offer all kinds of critical services to the people.
Companies like yours is working towards translating data into a service opportunities, however government and enterprises across the globe are not able to find a compelling answer on sovereignty of the data – who owns the data?, What is your view on data ownership?
This is the area where government needs to set the legal framework. Today, framework for data privacy and security comes from different edge. There are two extreme models, one which works in consumer space, when an organisation gives away the software for free such as search engines and social networking sites, where consumer do not pay anything at the price of accepting the terms and condition which says that their data can be used. Other model is you buy the services and decide whether to share or not. For an enterprise, giving away right to use data is like giving the right to grow. SAP enable customer, partner and enterprises to build new business opportunities with the help of our platform. Government across the world should create a clear framework which defines the boundaries around data and ensure investment security to the industry and protection to the data of the people.
Neutrality is the buzz word today. However, we understand that partnership will be the key for new wave of business innovation. In some areas SAP partners with its competitors such as Oracle. So how do you balance the business neutrality?
Indeed, partnership is the key for the new wave of business innovation and that is called coopetition. I think, it would be the next wave of IT transformation. The business neutrality can be managed by being transparent. At SAP, we clearly define the areas in which we partner and in which we could have fair competition. I personally feel, in anything, the best shall win. I have to admit that a healthy partnership creates much more win-win situation than the competitive.