German software company SAP SE is seeing big growth opportunities from China's e-commerce boom and its partnership with Alibaba Group Holding Ltd, said Mark Gibbs, presidentof the software giant's Greater China region, on Tuesday.
Gibbs' comments came after SAP Greater China delivered a strong financial performance in thefirst quarter of 2016, defying the country's economic slowdown.
As China beefs up efforts to upgrade its traditional industries with cutting-edge informationtechnology and tech-savvy manufacturing, SAP will see more robust growth here, Gibbs said.
SAP partnered with Alibaba Cloud last month to help local businesses accelerate digitaltransformation. The two sides are working on HANA one, a lighter version of HANA, which isSAP's in-memory computing platform, and aims to create a one-stop-shop cloud-computingenvironment.
"Instead of coming out with fancy statements, the tie with Alibaba Cloud is a long-timepartnership, and will be the next big growth engine for SAP," Gibbs said, adding the twocompanies will soon unveil a next-generation cloud-computing platform.
In the first quarter of 2016, SAP's China branch recorded double-digit growth in its softwarerevenue and triple-digit growth in its cloud business.
First-quarter operating profit for the company, headquartered in Walldorf, Germany, jumped 5percent from previous year to 1.104 million euros ($1.23 million) mostly due to a steady growth insales of its enterprise software, which helps manage business operations and customerrelations, and its cloud computing-related services.
In China, more than 75 percent of the company's customers are small and medium-sizedenterprises, while more than 50 percent of China's leading State-owned firms are also using thecompany's service.
"A lot of mergers have occurred in China's SOEs which are going global and facing mountingcompetitions. They have to be competitive and deal with vast amounts of data. That's exactlywhere SAP can play," Gibbs said.
SAP also has a product for small and mid-sized businesses called SAP Anywhere, which wasinnovated in China. It allows firms to buy services at a cost-effective rate and the implementationtime is hours, not days or months, which are often seen in rival products.
China's cloud-computing market is still in its infancy, but it is starting to get crowded, with playersincluding international heavyweights Microsoft Corp, and homegrown internet companies likeAlibaba and Tencent Holdings Ltd.
Vincent Fu, an analyst at Gartner Inc, said traditional software vendors such as Microsoft andSAP are eager to evolve into a service provider by boosting their cloud computing capabilities.
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