SAP unsure of meltdown impact on its operations

November 12th, 2008 - 10:15 pm ICT by IANS  

Bangalore, Nov 12 (IANS) Global enterprise software major SAP AG Wednesday said it was yet to assess the impact of global economic slowdown and financial crisis in the US on its operations worldwide as it was still on a “wait-and-watch” mode.“Certainly the financial meltdown will affect us as much as the global economy. To what extent nobody knows. If slowdown continues, it will impact our operations,” SAP executive board member Peter Zencke told reporters here.

The German firm had lowered its outlook for 2008 in the light of “uncertainties surrounding the current economic and business environment” after reporting Oct 27 a five percent drop in net profit for the third quarter this fiscal to 388 million euros ($486 million) from 408 million euro a year ago.

“In view of the uncertainty in the fourth quarter, we don’t have a specific outlook for the entire year. Though our performance in the India market was excellent with 46 percent year-on-year growth in the third quarter, it was not so in the US market,” Zencke said on the sidelines of SAP’s TechEd developers’ conference.

Asked how business was during the fourth quarter, Zencke said December would be very important to everybody in view of the continuing uncertainty. The outlook for fourth quarter was lowered on the basis of tough performance in the previous quarter.

To address the financial meltdown, Zencke said the governance structured had to be overhauled to go through the process. And every company has to be professional and prepare for the inevitable in such a situation.

On SAP India operations, the top executive said the company was not scaling down in investments or hiring.

“We are on track as far as India operations are concerned. There are no plans to revise it. As the largest development centre outside Germany and the third largest subsidiary in terms of employees, we have 5,297 people, including 4,069 engineers at SAP India Labs, 887 at our global development centre and 341 in the field for sales and marketing,” Zencke said.

Going forward, the company is looking at a total headcount of 7,000 by 2010.

SAP Labs India president Claus Neumann said the $1-billion investment plan budgeted till 2010 was on track and there was no scaling down of its operations in the Indian sub-continent.

“Our India labs make significant impact in global business environment by contributing to our global product portfolio. Many industry solutions spanning diverse verticals are designed and developed here,” Neumann added.

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