SAP needs partners to help move into on-demand, SME

Published: December 16th, 2009

BOSTON – SAP AG(NYSE: SAP) is very focused on working with partners to push offerings, specialized on-demand and analytical tools, besides just the enterprise resource planning (ERP) technology it’s been well-known for.

The reality is that large enterprises are a difficult market right now and the company is starting to focus on selling other things besides the traditional monolithic ERP implementation, said John Schwarz, SAP executive board member.

SAP will still continue to serve its traditional ERP customer as before, as well as meet the varied needs of other types of companies, said Schwarz. ERP offerings have been modularized into easily consumed segments for customers who need that, and hybrid applications can be deployed on-premise or on-demand.

Schwarz spoke during the half-day of keynotes at the recent SAP Influencer Summit 2009. The theme of this year’s event is clarity to reflect the new business environment and reality in which SAP, its customers and partners toil in today.

The German company must pursue growth markets, said Schwarz, specifically industries with “velocity and vitality” and bring those companies the assurance that they have the help they need to deploy SAP technology.

Schwarz said the goal is to marry go-to-market strategy with delivery capability by way of packaged applications that are easily consumable and translate into value. Having better packaging will facilitate partners’ work, he added.

SAP wants to ensure that targeting a vertical means doing so with partners that understand the customer’s business, its pain points, language, and industry operations, added Schwarz.

SAP will go to market primarily by industry, focusing on those that are “re-engineering themselves,” said Schwarz. Target sectors are those of high growth but SAP lower penetration and include financial services that must manage compliance and predict the future, and the public sector that is changing the way it relates to citizens. That said, Schwarz added fast growth and high penetration sectors like retail will continue to be targets.

The goal is to make it possible for customers to use SAP tools even if they didn’t purchase it directly. If a customer already has a preferred partner for their business whom they also want to represent SAP offerings, then the opportunity is there, said Schwarz.

On-demand and partners mix well, added Schwarz, because organizations looking to deploy on-demand tools won’t typically do so without input from a third party.

SAP partner Mountain View, Calif.-based supply chain consulting firm Bristlecone used the traditional systems integration and consulting model until the market began moving away from the monolithic ERP implementation.

President and CEO Ashok Santhanam said, as a partner, Bristlecone was forced to change from just being a systems integrator to “delivering supply chain outcomes for customers, whatever it takes.”

Several years ago, the company began making investments in packaged offerings like an accelerated demand planning tool. The recession, said Santhanam, has accentuated that need to shift the business model.

According to Pat Hume, SAP’s senior vice-president of global small-to-medium enterprises (SMEs) indirect channel, the company`s partner programs have been “really quite significant” with 50,500 out of 72,000 customers acquired through the partner channel. Currently there are 5400 partners in SAP’s partner ecosystem.

SAP partner, Wilmington, Delaware-based Blue Ocean Systems LLC, joined the Referral Program, announced last year, to target global customers and have a “good base to coordinate with other partners,” said the company’s president Eleanor Wu. The program, said Wu, allows partners like Blue Ocean Systems to refer business to other partners should they be more appropriate to meet a particular customer’s needs.