SAP is setting up another subsidiary in India, which will undertake development activities for the future releases of its core product, R/3.
Called SAP Laboratories India, the unit will be located in Bangalore and will be the German ERP software major's fourth centre in the world and second in India.
"We have already applied to the Foreign Investment Promotion Board and hope to get all the required approvals shortly, and are confident that the development centre will be operational by mid-October," said Rokiah Ahamed, managing director of SAP Asia.
SAP currently has one subsidiary in the country, SAP India, which takes care of marketing activities and runs SAP's Asian development centre. This essentially performs localisation of the company's ERP package to meet the specific requirements of customers in India and other parts of Asia.
But according to Ahamed, once SAP Labs India becomes operational it will take over this work, leaving just marketing and support to SAP India.
SAP has already taken up two floors in the IT Park that is being developed by the Karnataka government in the outskirts of Bangalore. "We have decided to invest DM10 million in SAP Labs India over the next three years, which will be invested in infrastructure and manpower" said Ahamed.
The company is particularly targeting the Indian oil and gas sector, and is holding talks with Bharat Petroleum and Indian Oil Corporation with a view to supplying a tailored version of R/3 for the sector.
Other key vertical focuses will be banking and the hi-tech sector itself.
SAP Labs India plans to recruit an additional 200 software professionals by the middle of next year.
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