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Ten years after its global launch, SAP is launching a new business in Russia and the CIS focused on the development of custom software for its platforms. In particular the company will be developing and expanding the functionality of implemented solutions, and providing technical support.
The main objective of the new line is to help clients find a balance between typical solutions and their own developments, and overcome the consequences of the patch automation that is common for many companies in Russia and the CIS, says Roman Zhuravliov, SAP CIS Consulting and Education Director.
SAP launched this business line globally in 2002 and now makes the service available in a number of countries. Custom development is provided by SAP staff in ten development centers in seven countries. The company says that around 1200 software engineers are involved and that development centers in India account for about 50% of the company’s custom software development.
SAP’s Director of Custom Software Development, Klaus Weber, says the company has created a number of mini-products based on solutions with similar functionality developed for different clients at different times. Currently there are 18 such solutions available. One of them is a work schedule planner for employees on an hourly work schedule, localized for Russia. The company plans to localize a few more products.
Even with custom development, the development rights remain with SAP. The company says that according to its statistics about 5 percent of clients raise rights issues with the company; however, they are generally resolved.
Roman Zhuravlyov says the company is planning to bring the volume of the new business to 7 percent of all SAP software sales in Russia by 2015. The company withheld comment on its financial estimates of SAP platform software development. However, it told CNews it is expecting to control 10 percent of the market. SAP says its decision to launch custom software development is due to the fact that local clients are now prepared for it, meaning that they have a significant amount of implementations based on SAP solutions. The company expects orders from commercial and government clients. “Any system in the state sector is a potential client for custom development,” said Igor Bogachov, head of SAP Russia.
Among other reasons for launching the service in Russia and the CIS, Bogachov mentions the region’s strategic priority for the company. This year the company intends to move from 4th to 3rd position in its software sales worldwide and it expects to see revenues of up to 1 billion euros by 2015. CNews estimates show that SAP’s revenue in the CIS exceeded 402 million euros in 2011.
Roman Zhuravlyov says the company has already opened a department focused on the new business line with five employees. It plans to set up a local development team based on SAP’s R&D center in Moscow that was founded with support from Skolkovo.