Oil prices could impact regional business – SAP

Ongoing volatility in oil prices could impact business in the region if companies are forced to cut down their information technology budgets, according to German business software firm SAP.

“The fact that the underlying economy is so linked to oil could be a challenge. We have not seen any impact yet with oil prices (falling). But it is something we need to recognise could be a challenge because customers will have different priorities,” SAP MENA’s chief financial officer George Riding said in an interview with Gulf Business.

But he added that despite such difficulties, the Middle East and North Africa remained a strategic market for SAP.

Riding’s optimism regarding the market stems from the growing expenditure on information technology solutions and cloud by governments and private sector institutions in the region. He added that SAP itself has seen tremendous growth in its cloud busi- ness over the years, recording “double-digit” growth.

“Cloud was something that people were talking about a little bit before. Overall, very little business (in cloud) was done in the Middle East but that is changing now as lots of companies are adopting it.

Everywhere we go, there is demand for cloud computing,” said Riding. He also emphasised that SAP had used its early entry into the region to steadily grow its market share in the cloud computing business.

“We are aware that there is a lot of competition here but we nevertheless have managed to grow our market share. We have moved from having 12 per cent of the market to well beyond 20 per cent over the last four years.”

Geographically, Saudi Arabia continues to be SAP’s top market in the region but Riding said that the company has also managed to create inroads in Qatar while also expanding operations in the United Arab Emirates.