With the government pushing for digital transactions and a unified technology driven taxation system, goods and services tax (GST) likely to be rolled out by July 2017, small and medium enterprises (SMEs) are gearing up to optimise the limited IT resources to remain agile and capitalise on emerging opportunities. Seeing a nascent market that has immense possibilities, German enterprise software maker SAP has recently launched SAP S/4HANA private cloud, a next generation business suite tailored for mid-size companies.
“Our commitment, through SAP S/4HANA private cloud, is to provide each and every Indian business the opportunity to tap into the power and potential of SAP HANA as they pave the way towards a pervasive digital business,” said Deb Deep Sengupta, president and managing director, SAP Indian subcontinent.
The Walldorf, Germany headquartered company said that its newly launched private cloud edition offers the flexibility and functionality of SAP S/4HANA enterprise management solution to mid-size companies at a simple and affordable subscription pricing model.
“Setting up an IT infrastructure that can take care of finance, HR, procurement, analytics requires a lot of expertise and capital investment. But if a company goes for a solution like SAP S/4HANA private cloud, upfront there is saving of 30% on that investment and it also allows them to focus on their core businesses,” Atul Sareen, vice president and head of cloud sales, SAP India told EC.
Available in a modular subscription pricing format without any upfront capital investment, SAP claims that the solution offers enterprise-calibre data security and faster time to value allowing SMEs to go digital within weeks on predefined services. The key advantage of SAP S/4HANA is that transactional and analytical data can be processed at a faster speed compared to that in a traditional database platform.
“The benefit of this solution is that both transactions and analytics are in sync. This is mostly used by large enterprises and mid-market firms. For SMEs, we have done a good amount of market research on S/4HANA and came out with S/4 HANA private cloud,” said Sareen.
SMEs, which are typically defined as units employing 500 employees or less or with a turnover of about R1,500 crore, usually have limited IT resources and require an ERP system with broad and deep functionality as well as low cost of ownership. The number of companies that fall under this category is large. SAP has more than 7500 customers across the subcontinent, out of which over 5,500 customers are SMEs.
This is the segment where maximum revenue growth is happening. But it is also a highly fragmented market where tech firms such as Oracle, Salesforce, and Intuit are trying to increase their share of the pie. In November last year, Oracle purchased cloud SMEs business apps player NetSuite and now both Oracle and SAP are likely to face off in this arena more often.
“We have been focusing on SMEs for many years. Currently, 75-80% of our installed base in India falls under this category,” said Sareen.
Overall, the SME market is divided into different segments and with the government pushing for local manufacturing under the “Make in India” initiative, companies are setting up new units. SAP sees this as an opportunity to increase sales of its ERP solutions in the country. Going forward, the company also plans to bring SAP S/4HANA public cloud edition in India.