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‘Machine Learning Is The Focus Area This Year’

In an exclusive interview with BW Businessworld, Khandelwal talks about their India focus, latest technologies, and their emphasis on innovation

SAP Labs in India is the second largest R&D centre for the company after its centre in Walldorf, Germany and among the three hubs in the SAP Labs network of 19 Labs across 16 countries. Dilipkumar Khandelwal, MD for SAP Labs in India, has a dual role as he is also the EVP and Global Head of Enterprise Cloud Services for SAP. In an exclusive interview with Ayushman Baruah, Khandelwal talks about their India focus, latest technologies, and their emphasis on innovation. 


What is the SAP Lab’s focus here? 

Over a period of 19 years, SAP Labs India has evolved to become an integral part of SAP’s global strategy. Our India network helps SAP Labs India contribute significantly to SAP flagship products such as SAP HANA, the platform for next generation applications and analytics; SAP S/4HANA, the next generation business suite; and several individual applications and solutions like HANA Enterprise Cloud; industry cloud and SAP Cloud Platform. We do have a team that takes care of country localisations, but that is only 4 per cent of our overall strength. SAP Co-Innovation Lab in Bangalore provides a platform for SAP as well as its partners and customers to develop solutions on SAP technologies and applications.

How much does SAP typically spend in R&D? How much are you planning to invest in expansion or hiring?
Our global R&D spend in 2016 was Euro 3.044 million. Our R&D expense as a portion of total operating expenses increased to 18 per cent. Globally our R&D headcount is around 28 per cent of our total headcount (84,100). We don’t break up R&D spend by geographies or specific locations. 85 per cent of our employees are from our development organisation. We are growing because we deliver value out of India as a location. It is not an outsourcing centre. We are partners in the success of the company which is evident from the presence of many global leaders based at our facility in Bengaluru. We are soon going to open our new facility, which will accommodate 2,400 people.

What are some of the technologies that SAP is working on? I haven’t heard much from SAP around AI and machine learning unlike what I have heard from IBM where they have worked on Watson and Cognitive...
The reason why you don’t hear about our footprint in these areas is because we are into the Enterprise Business, which is more B2B instead of B2C. Over the last couple of years, we have been investing heavily into IoT and SAP Cloud Platform. We have a big team in India that focusses on leveraging the IoT technology with our existing supply chain solution. Additionally, we have ownership for the Asset Intelligence network that helps management of physical assets including their manuals, servicing and smooth operations. Machine learning is a focus area for SAP this year. The SAP Cloud Platform gives us a strong set of machine learning APIs which can be consumed on the cloud by SAP internally and by SAP customers. This gives us the capability to completely re-think the way business processes are established and eliminate human intervention in many of the processes.

The platform which you have talked about is basically HANA?
Yes, SAP HANA is our technology. We have built a cloud platform on top of this technology, which we use to build our internal applications. We have opened this platform to our customers as well so that they too can build their products leveraging our technology. The cloud platform based on HANA is a default platform and helps solve a lot of integration problems faced by our customers. On this platform we have also built services for machine learning, AI and IoT. We have offered these open services to our customers too. 

HANA has been SAP’s biggest bet over the last few years. So how do you think HANA has fared over the last few years? Oracle CTO Larry Ellison has been quoted as saying, “If SAP is not successful with HANA, SAP dies, because Oracle will kill them.” 
We can settle this debate once and for all by acknowledging that SAP HANA, the market-leading platform for real-time computing, that helps companies accelerate their business process, has evolved into a strong platform in the short period of its existence. As an example, today we have over 5200 startups developing on our SAP HANA platform, over 5400 customers for S/4 HANA, our next-generation business suite and 1400 SAP HANA One customers.

What is SAP Labs’ focus on innovation?
The SAP Startup Studio, an accelerator programme that we started in June 2016, is one of the ways in which we have institutionalised interaction with startups. Through this initiative, we provide mentoring, infrastructure, and technology support to seed early-stage startup companies. The programme is run out of a 75-seat facility at our Bengaluru campus and we incubate startups in select technologies and verticals for a period of one year.

You also have some kind of an entrepreneurship programme where you encourage your employees to start on their own...
Path-breaking innovation stems from a healthy ideation process. We encourage our own people to come up with disruptive ideas. About two years ago, we launched our Intraprenuership programme which enables our employees to act as entrepreneurs and transform their innovative ideas into profitable business in new markets. The programme supports from the articulation of the initial ideas to its successful commercialisation, through four stages — ideate, validate, accelerate and incubate. Employees who have successfully completed two years or more in SAP can take sabbatical leave for up to two years. If their venture succeeds, we hope they will be promoters and aggregators for SAP in the outside world. But if they don’t, we will welcome them back and learn from their experience to help us continue in our journey of innovation.

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