Jean-Bernard Rolland, VP Solution Management at SAP
BayBrazil: 2010 has been a good year for SAP in Brazil. What’s the projected growth this year?
Jean-Bernard: We cannot yet provide a specific projected growth number for the entire year, but it is expected to be significant and significantly above the 19% average growth globally. In 2009, Brazil was in 10% percentile of country growth. The Americas region grew faster than the EMEA region. Brazil was at the forefront of the expansion. This year, for Brazil, we are expecting a double-digit percentage growth in the software segment and substantial growth in the services market. On the development side SAP’s opened a new campus in Brazil in June 2009.
BayBrazil: How does it compare with the company’s growth in other emerging economies?
Jean-Bernard: Brazil is a particular case, because SAP already dominates this market but we are still seeing fast growth. Unlike other developing countries, Brazil has a very well established homegrown industrial base. Companies like Petrobras, Ambev and Ambraer have little equivalent in other developing countries where the key discipline is to cheaply manufacture technologies that have been designed elsewhere. Brazilian engineers in Brazil are world-class and Brazilian technology is actually leading the way in several domains. For example, the technology Petrobras is developing for deep-water extraction is amazing. That means that Brazilian customers are also very demanding in terms of quality of the products we offer.
BayBrazil: SAP recently opened a new Innovation Lab in Sao Paulo. Tell us about the company’s plans for Brazil in the next few years.
Jean-Bernard: Brazil is a growth country. It represents about 40% of our business in Latin America. With more than 190 million people, it also represents around 40% of the total population of Latin America. Only six years ago, 54% of the society was classified as poor. Now it is only 26%. So, about 50 million people have joined the middle class. And these are people that are consuming food, beverages, clothing, and cosmetics, thus fueling the economy and creating a new market. It means Brazilian companies have a massive growth opportunity and SAP can accompany this growth. Our plans is to double in size in Brazil in the next three years, targeting not just the Brazilian giants like Petrobras or Gerdau, but also more traditional companies. For example, Embelleze, one of the largest cosmetics companies in Brazil but still relatively unknown abroad, invested in SAP software to guarantee an environment capable of supporting its growth in coming years. Alimentos Wilson is a traditional Brazilian manufacturer in the food and beverage segment, has initiated a new process of expansion in its business through the SAP solution for SMEs.
BayBrazil: What is SAP’s market share compared with its competitors in Brazil?
Jean-Bernard: Let’s define our market. Total IT spend in Brazil is roughly 32 billion in 2009, with software representing 5 billion. There are a total of 152 large enterprises as defined by SAP (over 2000 employees or a billion dollars in revenues). According to IDC, SAP dominates this market, with a total market share of 25%. Other international competitors such as Oracle are far behind. The only real competitor is a local player called Totvs, with a solution tailored to the local market.
BayBrazil: How do you compare the quality of the workforce in Brazil? Is it easy to hire developers and engineers?
Jean-Bernard: Brazilian engineers are really good, but there are too few of them. With taxes and bureaucracy, this is still one of the dark areas in Brazil: education. It is difficult to find enough good people as the university system is not keeping pace with the growth of the economy.
BayBrazil: You spend a good chunk of the year traveling from Silicon Valley to Sao Paulo. What changes have you noticed in the last few years?
Jean-Bernard: Optimism is amazing in Sao Paulo. It sounds like Brazil is taking seriously its new role as a world power and that Brazilian companies are becoming bolder and more ambitious. It is amazing to see the productivity progress Brazilian companies are making, how much they invest and how much value is created through these investments. On the not-so-bright side, Brazil is becoming very expensive in all regards.