SAP presses deeper into China with new cloud data center
Business intelligence stalwart SAP SE is pushing deeper into the lucrative Chinese market for enterprise software with a new data center that will deliver cloud services to local firms. The Shanghai facility marks one of the first major milestones on the growth path of China Datacom Corp., the joint venture that the German software titan established with China Telecom Corp., last November to accelerate its expansion in the region.
The launch comes hot on the heels of IBM entering an agreement with the carrier, which ranks as the third largest in China, to provide its internal IT organizations with assistance in setting up a network of data centers that will provide SAP services to customers in hotbed cities such as Beijing and Guangdong.
Big Blue is one of SAP’s fiercet competitors in its core business intelligence market as well as the strategically important in-memory computing space, but it’s also a top consultancy partner that has thousands of SAP implementations under its belt. The growing tensions between the U.S. and China over cyber snooping have sent the Armok-giant’s regional revenues spiraling over recent quarters, leaving the world’s top enterprise vendor no choice but to fight over scraps left over by competitors such as SAP. IBM said revenues in China fell 20 percent in the first quarter
In contrast, the German software stalwart’s China business saw double-digit sales growth across the board last quarter, CEO Bill McDermott revealed on an investor call attended by Bloomberg last month. Mark Gibbs, SAP’s regional manager for China, revealed in a recent interview with the publication that China Datacom has been following a similar trajectory.
The joint venture already serves some 15,000 China Telecom customers, according to the executive, a number that the company is banking on the new data center to help increase. Gibbs said that the facility will initially only be used to deliver “human resources solutions”, which can be taken to mean the managed services SAP obtained through the landmark acquisition of SuccessFactors in 2012, and expanded from there. The vendor’s widely-used customer and supplier relationship management, purchasing and e-commerce products are set to be added to the roster in the coming months.
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