SAP To Expand China R&D
SAP, the world's leading maker of enterprise resource
planning (ERP)software for corporations, plans to expand
its presence in the China market by building a new software
park situated at the Shanghai Pudong Software Park. The
new park will be built in three phases, and with each
phase, 500 software developers will be added.
SAP, based in Germany, is the world's leader in applications
used by corporations which help them to track resources,
manufacture, sales and distribution. The company's software
is known for its high licensing costs, long implementation
time and robustness. Worldwide, its main competitor is
Oracle,
which has recently bought another major competitor, Peoplesoft,
as part of its effort to expand its client base.
Currently, more than 800 corporations in China, mostly
state-owned, use SAP in China.
The challenge for SAP in its expansion in China is to
acquire more small and medium-sized clients to license
its software. For SAP and Oracle, the main challenge is
that SMBs need software packages which are easier to install,
as they have less money to spend on professional services
to handle installation and customization. As SAP goes
after this market, it will run into pricing competition
and software packages from IBM
and Microsoft
which go after the same market.
While SAP already offers solutions for the SMB market
in Europe and North America, these solutions are only
being localized now for the Chinese market. Since the
SMB market in China is fragmented into many different
sectors, but is growing rapidly, it's highly likely that
most of SAP's China efforts will focus on this highly
competitive and price sensitive market.
Before you go, did you like this article?
If so, you can receive a free email newsletter version
each weekday. Sign up using the China Business Express
form on this page.
