When mature markets are saturated, emerging regions become great opportunities. In general, emerging countries tend to grow at higher rates due to lower market penetration. German software company SAP has for years followed this opportunity across the Latin America region with optimism.
“It is one of the faster growing areas for uses,” explained Felix Feddersen, COO and VP for Latin America at SAP, told RCR Wireless News.
Feddersen cited SAP’s 22% growth in the region in 2011. “We forecast a similar growth for this year,” Feddersen added.
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SAP noted that Brazil accounted for 50% of total revenues in 2011, while Mexico represented 25% and the other countries the remaining 25% share.
“Argentina and Colombia have potential, as well as Chile,” noted Feddersen, adding that Brazil has grown at a similar rate to the entire region, while Mexico grew above the average.
Indeed SAP’s revenues in Brazil are expected to triple between 2010-2014.
Mobile boost
Mobility is one of pillars for SAP’s growth. “Latin America is a very interesting market. It is passing through changes and with the economy growing fast, companies have to be more productive. There are many opportunities in the mobility market,” noted Mark Krofton, mobility sales VP for Latin America and the Caribbean at SAP.
Krofton cited the lack of bank users and highlighted opportunities for m-payment and m-banking solutions across the region. “In Colombia, the penetration of bank accounts is 60%, while mobile penetration is 100%. There are a large set of the population to reach.”
While there is ample opportunity across the region, Krofton also highlighted challenges, including telecom infrastructure and device costs.
“Companies in Latin America as just as sophisticated as those in emerging markets,” Krofton explained. “However, the cost of the devices could be a limiting factor. In addition, there’s a need for offline applications because there are parts where connectivity is poor.”
Krofton has a dedicated team for the region and, during the interview, highlighted the mobile growth prospects.
Mobile solutions are part of SAP’s non-ERP portfolio along with big data and cloud computing. SAP has a goal to increase revenue share of non-ERP solutions. Feddersen said that four years ago non-ERP solutions accounted for about 5% of SAP’s total income, and has increased to its current 50% share.
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