Enterprise resource planning software firm SAP expects half of its revenue to come from cloud solutions over the next two to three years, in India and globally. Its older customers are now making a shift to the cloud, said Subramanian Ananthapadmanabhan, vice-president-digital core, SAP India.
“Most of them started on-premise and are now moving to cloud-based offerings, so there’s a huge opportunity in this market,” Ananthapadmanabhan told ET.
He said that the cloud business in India was growing in the high double digits, without sharing specific numbers. The overall market for cloud solutions in India has grown at 300% in the last five years.
“The big change we see in the last few years is that no one is asking for only on-premise solutions anymore. In the last three years, we’ve seen customers come back saying that they don’t want only infrastructure or platform as a service, but a combined software as a service offering. We’re seeing a shift to a hybrid model where companies will have data in public and private clouds, as well as on-premise data,” he said.
In its recent quarterly results, SAP’s global cloud revenue grew by 40%, to touch 1.69 billion euros.
India is among the fastest growing geographies for SAP. The company has 10,200 customers in the country across the enterprise, SME and new age company segments, with the SME segment comprising almost 80%.
For 2019-20, the focus will be the cloud, he said.
“There are two aspects to this. Customers are transforming themselves digitally and moving to an intelligent enterprise. The focus is on moving this intelligent enterprise to a cloud,” Ananthapadmanabhan said.
There were some concerns around data privacy and residency, but the market has matured and is past that stage now. Organisations are now open to considering cloud solutions in newer areas and they are also using it for digital transformation, he said.
The public cloud services revenue in India is likely to reach $2.4 billion in 2019, a 24.3% growth over last year, according to Gartner.
“The shift from ‘cloud-first’ to a ‘cloud-only’ model in India is pushing organizations to increase spending on public cloud services to advance their digital business initiatives,” said Sid Nag, research vice president at Gartner. While India’s share of global revenue is just over 1%, it is the third fastest growing market globally.