SAP has announced that it is increasing the number of staff at its Bangalore, India, development centre to 3000 by 2006.
The centre currently employs 1100 developers, and SAP planned to increase the headcount to 1500 by the end of this year, chairman of the executive board and chief executive officer of SAP, Henning Kagermann, said.
The development centre in Bangalore, called SAP Labs India, would continue to be the largest development hub for SAP outside Germany, Kagermann added.
SAP is also investing $US24 million for the third phase of the expansion of a new development facility that it set up last year in Bangalore. The company has already invested heavily in this new facility.
Even as a number of analysts and industry executives, including N.R. Narayana Murthy, the chairman of Infosys Technologies, a software outsourcing company in Bangalore, have warned that China is catching up with India in software development skills, SAP plans to expand its software development resources more in India than at SAP Labs China in Shanghai, which was started in 1997, one year before its Bangalore centre.
The development capacity at the China centre was 10 per cent that of SAP's development centre in India, and it was not growing as fast, Kagermann said.
SAP did not have plans as of now to build a development hub in China comparable to the one it has in India, he said.
"It is a question of focus," Kagermann said. "We are happy with the success we have had in India, and it makes more sense to expand here."
As the facility in China was close to the Japanese and Korean markets, SAP would focus on developing the centre as a support location, Kagermann said.
SAP Labs India does product development for the parent company, and was involved for example in the development of NetWeaver, SAP's integration and application server middleware.
About 40 per cent of the development for SAP's Business Solution Group-Manufacturing Industries is done from India, making the Bangalore centre the largest development centre for the manufacturing industry.
About 33 per cent of the country specific localisation of mySAP Human Resources is also done at the Bangalore centre, which also offers custom development for key SAP customers.
SAP also plans to team with large Indian software companies to offer services worldwide around its software.
"These Indian companies can help to drive the cost of ownership down for our customers," Kagermann said.