Russian SMEs Vital To SAP Cloud Strategy

German software group SAP has announced plans to open its first two data centres in Russia, in an investment worth EUR20mn. This move is in line with BMI's view of the expected take-up of cloud-based IT software solutions by Russian businesses keen to leverage technology to improve their productivity and cost efficiencies.

SAP has targeted emerging markets and Russia in particular, as a market it expects to see double-digit growth from in software and cloud revenues through 2017. According to Vyacheslav Orekhov, head of SAP's business in the CIS region, SAP's revenues in the Russia, Ukraine and CIS region, increased by over 20% in 2013. This marks the region out as one of the faster growing units for SAP, as the group recorded growth of 4% during 2013, reaching EUR16.8bn. The company does not provide a breakdown of its revenues by individual countries but in 2011, SAP stated that it was targeting revenues of EUR1bn (USD1.4bn) in Russia and the CIS region by 2015.

The move into the Russian data centre market follows a number of established players such as MegaFon, IBS Group, Croc and more recently DataPro ( see 'DataPro Taps Into Growing Data Centre Demand' February 25). SAP is looking to build one centre in Moscow and the other just outside the city. Moscow offers a lot of advantages for cloud computing, such as a well-developed telecoms sector, evidenced by the fact that MegaFon has entered the cloud computing space. Moscow also has skilled IT professionals and a large number of businesses that are looking to improve cost efficiencies. SAP's co-CEO identified utility providers, the oil and gas industry, banks (such as Sberbank), retailers (including X5 Group), Aeroflot and Russian Railways as being key industries and companies in Russia for SAP's solutions. The company has also shown an increased focus on small and medium enterprises in its emerging market operations and these businesses accounted for about 65% of SAP's customer base as of July 2013. SAP's HANA application will enable these enterprises to track consumer information in real-time, helping to improve efficiencies.

Double Digit Growth Expected For Cloud Spending

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This article is tagged to:
Geography: Russia, Brazil, Ukraine

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