SAP@25 In India: Augmenting AI Potential Of Its Fastest Growing Market

SAP, with its research and development arm, SAP Labs, is commemorating its 25th year in India with big announcements, the latest being a pledge to double its artificial intelligence (AI) talent base by 2024. 

India: A Hub For AI Innovation

SAP's journey in India commenced in Bengaluru with just 150 employees. Today, it boasts a workforce that has grown a hundredfold. The company is currently constructing another office in Bengaluru, set to accommodate up to 15,000 employees. The groundbreaking ceremony for this new campus in Devanahalli, near Bengaluru Airport, took place on 29 May. 

India holds a unique position within SAP's global research and development landscape, with 40 per cent of the company’s workforce based in the country. Also, 25 per cent of all SAP patents originate from SAP Labs India, underscoring the country's significant contributions to original research and development in the organisation.

It is reported that nearly 60 per cent of its Indian workforce already engaged in AI-related projects, SAP is gearing up for substantial expansion in the AI domain. 

During a fireside chat on Thursday, Gangadharan highlighted India’s burgeoning presence in the AI arena. She said, “If I just also look at the AI talent in India, we are talking about 16 per cent of the world's global AI talent.” 

She emphasised that India leads in AI skills penetration and ranks fifth in AI research and scientific contributions globally. Gangadharan was recently appointed as nasscom Vice Chairperson.

Approximately 34 per cent of SAP Labs' workforce consists of entry-level employees. 

SAP’s AI Push

In terms of financial performance, SAP reported a five per cent revenue growth in the second quarter, aligning with market expectations. Cloud revenue for the same period was EUR 3.3 billion, slightly below the estimated EUR 3.4 billion. Total revenue reached EUR 7.55 billion, compared to a median forecast of EUR 7.6 billion. 

SAP's CEO, Christian Klein, underscored the company’s focus on AI’s transformative potential during Q2 earnings call. He said, “We see significant opportunities ahead, in particular through the transformative power of AI.” 

To reinforce this commitment to AI, Sapphire Ventures, a technology-focused VC backed by SAP, announced a USD 1 billion investment in AI-powered enterprise technology startups in July 2023. The VC firm made strategic investments in three leading generative AI companies, including Aleph Alpha, Anthropic and Cohere. 

As per PwC's assessment, AI has the potential to make a substantial contribution of up to USD 15.7 trillion to the global economy by 2030.

While the German software major presently offers generative AI-powered applications worldwide using OpenAI’s LLM GPT-4, Gangadharan disclosed that SAP is actively engaged in the development of proprietary LLMs. This endeavour places a significant emphasis on ensuring high-quality solutions for customers, underscoring the critical importance of “Responsible AI”.

In the upcoming months, SAP intends to unveil fresh solutions and capabilities within its portfolio, harnessing the vast potential offered by AI.

As per PwC's assessment, AI has the potential to make a substantial contribution of up to USD 15.7 trillion to the global economy by 2030. 

During a fireside chat with Gangadharan at SAP Labs Bengaluru, Hemlata Vedula, Partner (Consulting) at Deloitte India, pointed out that India boasts a significantly larger number of AI use cases compared to the Western world. Given India's status as SAP’s fastest-growing market, this presents a promising opportunity for SAP. To capitalise on this potential, the company must strategically align its cloud and AI offerings to cater to these diverse needs in the future.