SAP AG announced Tuesday that it is increasing the number of staff at its Bangalore, India, development center to 3,000 by 2006. The center currently employs 1,100 developers, and plans to increase the headcount to 1,500 by the end of this year, Henning Kagermann, chairman of the executive board and chief executive officer of SAP in Walldorf, Germany, told reporters in Bangalore.
The development center in Bangalore, called SAP Labs India, will continue to be the largest development hub for SAP outside Germany, Kagermann added. SAP is also investing Euro 20 million (US$24 million) for the third phase of the expansion of a new development facility that it set up last year in Bangalore. The company has already invested Euro 20 million in this new facility.
Even as a number of analysts and industry executives, including N.R. Narayana Murthy, chairman of Infosys Technologies Ltd, a software outsourcing company in Bangalore, have warned that China is catching up with India in software development skills, SAP plans to expand its software development resources more in India than at SAP Labs China in Shanghai, which was started in 1997, one year before its Bangalore center.
The development capacity at the China center is 10 percent that of SAP's development center in India, and it is not growing as fast, said Kagermann, who added that SAP did not have plans as of now to build a development hub in China comparable to the one it has in India.
"It is a question of focus," said Kagermann. "We are happy with the success we have had in India, and it makes more sense to expand here." As the facility in China is close to the Japanese and Korean markets, SAP will focus on developing the center as a support location, Kagermann added.
SAP Labs India does product development for the parent company, and was involved for example in the development of NetWeaver, SAP's integration and application server middleware. About 40 percent of the development for SAP's Business Solution Group-Manufacturing Industries is done from India, making the Bangalore center the largest development center for the manufacturing industry. About 33 percent of the country specific localization of mySAP Human Resources is also done at the Bangalore center, which also offers custom development for key SAP customers.
SAP also plans to team with large Indian software companies to offer services worldwide around its software. "These Indian companies can help to drive the cost of ownership down for our customers," said Kagermann.