SAP sees China business up in the cloud

China will become the biggest market for SAP AG in terms of new software sales by 2020, boosted by robust cloud and data-base demand, company executive said on Wednesday.

China's cloud market could be bigger than the rest of the world combined, according to Bill McDermott, co-CEO of the German-based business software maker.

SAP has more than 330 million customers in the cloud, more than any other software company.

China's emerging private sector and young entrepreneurs could provide a huge opportunity for software companies to expand business, said McDermott.

"Nothing compares in scale to China, with 340 million millennials, China is the world's most mobile and social market," said McDermott, adding that the younger generation is more likely to take advantage of technologies such as cloud computing when starting a new business.

SAP is teaming up with local carrier China Telecom to enter the public cloud market.

Mark Gibbs, SAP's China head, said the company has been very careful when entering China's cloud market. "We have to build our software ecosystem before pulling out the cloud services in China," said Gibbs.

The German company will use China Telecom's cloud computing facilities in Shanghai to serve Chinese customers - most of them will be small and mid- sized enterprises.

"The partnership is set to alter the current cloud computing landscape in the country because SAP will provide cloud services to both local and overseas companies," said Hao Jianying, vice-president of research firm CCID Consulting.

"As increasing number of cloud computing projects land in China in this year, Chinese customers start to understand the importance of mobility and cloud-based data services," said Hao.

Turnover in the nation's cloud computing sector is on track to exceed 80 billion yuan ($13 billion) in 2013, a jump of 34.6 percent year-on-year, according to CCID.