SAP AG, a Germany- based enterprise software vendor, announced that it had set up a new research center in Shanghai on March 25, and it was about to triple its headcount of research centers in China to 1,800 by 2008.

This was the latest move by SAP to penetrate the domestic enterprise software market for China, which is worth of USD3 billion annually and compete head-to-head against rivals including Oracle and Microsoft.

"It is a milestone as we now 'invent-in-China' instead of 'made-in-China"', Shangh-Lin Jui, SAP Labs China president, said at the opening ceremony.

However, SAP refused to admit that the proliferation of research team in China is due to the skyrocketing salaries of engineers in India.

Mr. Shang-Ling Jui added that Chinese software engineers' salaries have been increasing by 5 percent to 8 percent during the past few years, a trend should be continue in years ahead.

Jui Shang-Ling disclosed that SAP will further increase its investment in China in an effort to backup its swelling research team. The upcoming investment spree will involve EUR 40 million to EUR 50 million by 2008, in contrast to EUR 22 million for 2005.

Thus far SAP has put the spotlight on small and mid-sized Chinese companies, because the company believes that they have huge potential of development. "

At the moment, 90 percent of Chinese big companies are adopting software of SAP, including petrol giant CNOOC and steel titan Shanghai Bao Gang Group.

At present, the Shanghai center in Zhangjiang High-Tech Park is one of SAP's top five research hubs globally along with those in Australia, Japan, South Korea and India.

The center, staffed with 450 employees, will serve clients in Asia Pacific as well as Europe and the United States.

In the past nine years, SAP China's revenue surged 70 percent annually on average and the company will continue to grow rapidly through the center, which will be expanded in 2008.

The revenue in the Chinese software market will hit USD6.23 billion by the end of 2009 from 2004's USD2.65 billion, according to report of IDC.

Separately, Oracle said it will invest heavily to set up sales offices or research centers in 26 second-tier cities in China by the end of this year.

Overseas companies, which invest lavishly in research, are among the most-profitable in the high-end enterprise software market, IDC said.

Founded in 1972, SAP is the recognized leader in providing collaborative business solutions for all types of industries and for every major market.

Serving more than 32,000 customers worldwide, SAP is the world's largest business software company and the world's third- largest independent software provider overall.

It has a rich history of innovation and growth that has made it a true industry leader. Today, SAP employs more than 35,000 people in more than 50 countries. Its professionals are dedicated to providing the highest level of customer service and support.

To ensure SAP's position as a technology leader, SAP Ventures invests in emerging entrepreneurial companies that are advancing exciting new technologies. And through SAP Research, SAP introduces new ideas for future solutions.

Headquartered in Walldorf, Germany, SAP is listed on several exchanges, including the Frankfurt Stock Exchange and the New York Stock Exchange, under the symbol "SAP."