SAP AG is to invest US$1 billion in India over the next five years, Henning Kagermann, the company’s chief executive officer told reporters in Delhi on Wednesday.

SAP of Walldorf, Germany also announced that 20 percent of its global research and product development, as well as services and support, will come from India by the end of this year.

SAP already has a software development center in Bangalore, called SAP Labs India, its largest outside Germany. The company announced last year that it was increasing the number of staff at the center to 3,500 by the end of this year. The company currently employs about 2,750 staff there.

A number of multinational software and services companies are expanding in India to take advantage of India’s low-cost staff for software development and services, and to address India’s growing market for IT products and services. IBM Corp. announced earlier this year that it would invest $6 billion over the next three years in India to expand its services delivery from India, and to address the local market.

Besides investing in product development, SAP is also setting up centers of excellence in India that will cater to the growing domestic market for its software. The centers will expose Indian clients to SAP software, and also provide a platform for SAP partners to showcase their capabilities, the company said. SAP is adding centers focused on key markets such as the public sector, retail, and small and medium-size enterprises.

Kagermann described India as one of the company’s top eight strategic markets for the company. SAP has 1024 customers in India.



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