SAP tips $2bn into China expansion plan

As Japan slows, eyes turn to China.

German software giant SAP will spend more than $2 billion in China over the next three years to support its expansion there. 

SAP will add 2000 people to its payroll in China through to 2015, nearly doubling its existing headcount there of 2500 while adding six offices to the five already in operation.

"We will also create more research and development facilities, hire thousands of people, train more experts and consultants and bring our world-class benchmarking methodology to China - all aimed at helping drive sustainable growth through informatisation," SAP AG co-CEO Bill McDermott said.

The company will focus on China's small- and mid-sized market, where the Chinese Government recently offered tax and financing incentives, Bloomberg reported. 

SAP currently has 3900 customers in China, a fraction of its 176,000 across the world. 

SAP includes China in its Asia-Pacific/Japan regional figures but does not disclose revenues by country.

At its third quarter earnings update it noted the earthquakes in Japan had dampened growth there, while China and India were experiencing rapid growth.  

China also is part of SAP's plan to boost revenues from US$16 billion last year to US$27 billion by 2015, according to the Financial Times. 

Exactly how much of the $2 billion represents spending that was not already allocated to China remains a mystery. 

A SAP spokesman told IDG the US$2 billion was an entirely new investment, however another spokesman told Bloomberg it represented an additional investment of "hundreds of millions of dollars". 

SAP's latest China announcement follows its August expansion of MaxAttention services to support large Chinese enterprise ERP customers.