Africa the next big growth market – SAP

The business software maker reckons key African markets will grow by at least 50%/year for the foreseeable future. By Duncan McLeod.

Bill McDermott

SAP, the world’s largest developer of business management software, believes Africa will be its fastest-growing market over the next five years and the company, which is headquartered in Germany, plans to pour money into the continent to ensure its business in key markets grows to US$1bn/year by 2017.

SAP co-CEO Bill McDermott, who is in SA this week to meet with customers and partners, says the software company is stepping up its investment in seven African markets, namely SA, Angola, Côte d’Ivoire, Ghana, Nigeria, Kenya and Rwanda. He says the company believes these countries will bring in growth of at least 50%/year for the foreseeable future, although he admits this estimate is conservative and the figure could be in the “triple digits”.

“The price of admission is 50% growth,” McDermott says. “We think this should be the fastest-growing market in the world.”

Growth is expected to come from the public sector, utilities, gas and oil, and financial services.

SAP’s software, which has traditionally been installed by large companies looking to manage their internal systems, from human resources to financial management, is increasingly pushing down into small and medium enterprises and is also developing cloud computing-based solutions and stepping up its fight with principal rival Oracle in the database market.

“We’re in the database business,” McDermott says. “This market [Africa] has not had choice. It has had one primary vendor. I am told from my customers this primary vendor has not necessarily been everything they hoped for. By giving them choice they’ll at least have a comparison of database technology.”

He says the company will work more with partners to drive its growth in Africa, rather than selling directly its software to clients. The company is also stepping up its focus on providing support and software to universities and trade schools in an effort to increase the number of SAP skills on the continent.

He expects the growth to come from across SAP’s product offerings, and from small, medium and large companies, including in SA, where he says people mistakenly think SA is a mature market for the type of enterprise resource planning systems the company sells. “The upsell on the existing account base remains huge.”  — (c) 2012 NewsCentral Media

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