Data localisation push may impact innovation: SAP

BENGALURU: Business software major SAP said a push for data localisation in India may affect innovation but the company was open to hosting applications on local servers if the government insists.

Bernd Leukert, head of product innovation, SAP, said a regulatory mandate to store data on business transactions locally would cost the company dearer and if the government insists it has to store information locally.

“I think it has massive impact because while years ago access to information was a problem because a lot of it was not digitised, distribution of information took much longer, now with digitisation of information whenever it is created it can be accessed from a technology perspective. What is regulation doing, I call it a modern way of politics. Government says if you want to do business in my country the data has to be stored in a local data centre, that leads to the fact that where technology has overcome the physical boundaries of a country border, suddenly the government is introducing these borders again,” Leukert told ET in an interview.


SAP, which has more than 10,200 customers across India, Sri Lanka and Bangladesh, said the primary impact would be significant investment for setting up infrastructure in India. SAP has completed 20 years in India and the company is setting up another office near the Bengaluru airport to expand its footprint here. The company said it would have its own data centre infrastructure across different geographies including India, barring China where it will mandatorily have to use other service provider.

“We would not need data centres in so many countries, but if the government forces us this has massive impact on our business. When more countries; let’s take India as a country is having a digital agenda and is digitising all the services to the people... it needs a data centre infrastructure, (and that) is becoming a mission critical infrastructure,” said Leukert.

The SAP board member said under the leadership of Dilip kumar Khandelwal, managing director, SAP Labs India, the company set up a startup studio to enhance the ecosystem. He pointed out that setting up SAP Leonardo Center in India reassures significant commitment of SAP to the region and contribution of the Indian talent to the parent company. The proposed data protection policy of India has sought every organisation or business to store a copy of data locally in a server or data centre in the country and critical personal data to be processed only in India.SAP said the primary impact would be significant investment for setting up infrastructure in India.