SAP launches gen AI tools for developers

NEW DELHI :German enterprise software firm SAP on Thursday launched a series of generative artificial intelligence (AI) tools and extensions for its enterprise resource planning (ERP) software suite, SAP Business Technology Platform. However, the company is yet to decide on a pricing strategy for its generative AI capabilities—some of which are not only expensive to build, but can also be costly to run and maintain.

Kulmeet Bawa, president and managing director of SAP Indian subcontinent, said in an interview that the September quarter marked the 12th consecutive quarter for India being SAP’s fastest growing market globally.

SAP’s new tools, which have so far been under internal testing, are focused on using generative AI to increase developer productivity, and also offer companies a multi-large language model (LLM) interface that will allow enterprises to choose which AI model they would want to build on. The repository of AI models include OpenAI’s GPT-4, Meta’s Llama-2, and others.

“Some of the embedded generative AI applications will not be priced separately, and are part of the overall subscription for our tools. But, we may come up with a different pricing strategy for all the generative AI investments that we are doing. For this, we’ll start seeing a way ahead once we take the products to the market, and get them on our price list. We haven’t taken a call on this yet,” Bawa said.

Pricing is a key conversation for generative AI tools, simply due to the amount of computing power that such tools need in order to run. Industry experts have said that over time, companies will come up with a wide range of solutions in order to make generative AI applications more affordable. One such so far was Qualcomm’s inclusion of small, offline AI models on smartphones to commercialize the technology for developers. IT service providers have also spoken about diversifying LLMs into smaller sizes, in order to make AI adoption broader.

Adding to this, Bawa said, “The way we price our products will depend on the amount of effort we’ve put in for each tool. Some of the generative AI-based customer experience (CX) applications that we’ve already launched, which include content generation and customer support automation, are easier. But, if we build and offer our own LLM to clients, tools based on that would be more expensive.”

Speaking on the sidelines of the company’s annual technology conference held in Bengaluru, Bawa said SAP’s India division continued to remain their fastest-growing by revenue globally for the 12th consecutive quarter, as of 30 September. “This means that cloud adoption is there in the market, and Indian companies are transforming,” Bawa added.

While SAP does not disclose region-wise revenue and financials, the company said in its September quarter financial filing in Germany on 18 October that India had “outstanding revenue growth.”

This, Bawa said, is a clear indication that India’s enterprise tech spending has not declined.

“There is caution in the market in the sense that companies are watching. There is so much happening geopolitically, for which there is a slight caution. But cloud is something that deals with mission criticality. Companies are looking at cloud as a way to leapfrog, and build resilience against potential future supply chain disruptions,” he added.

SAP is also compliant with all data regulations of the country, Bawa said. “We would never be non-compliant with the law of a land—we’d rather stay away. But, over time, in some countries, we’ve had governments approach us to consult on the right way ahead for data governance. In India, we already have data centres that localize all data for our cloud, ERP, BTP and others. By mid-2024, we’ll localize data operations for other tools such as Ariba as well. While some tools do not warrant 100% data localization, it’s generally a good practice—especially with generative AI coming in.”