SAP identifies a fruitful market (2)

SAP said its "continued investments in key innovations" and global expansion activities dragged down profits. Its key innovation areas, including cloud computing, mobility and the flagship product SAP HANA, delivered "exceptional growth" globally, it added.

SAP predicted its annual operating profit could rise to 5.85 billion euros ($7.86 billion) to 5.95 billion euros in 2013, boosted by growing demand in emerging markets such as China.

China is the "most strategic" market for SAP globally. The company will continue to invest in the nation to guarantee future growth, said Watts.

In November 2011, the company announced it will invest at least $2 billion in China by 2015 to keep its competitive edge and fund innovation.

SAP recruited more than 1,000 employees in China to beef up its marketing and support teams last year. The company now has more than 4,000 employees in the country.

Alex Atzberger, head of its China strategy and growth plan, said "several hundred" people will be recruited this year to beef up the company's sales and services, especially in smaller cities.

"Looking ahead in 2013, we will have more opportunities in industries including urbanization, transportation and food safety, where SAP is ready to provide enterprise software solutions," said Atzberger.

Currently, about 50 to 60 percent of the software revenues were generated by State-owned enterprises but Watts also expects privately owned firms in the economically developed east coast regions to generate more profits for SAP in the coming quarters.

"If you were a betting person, I think you should probably put a little money on the SOEs," said Watts.