The transformation of business software application vendor SAP AG (NYSE: SAP) from a direct-centric company to serious channel player has been underway for a number of years, and it got a big boost recently with news the vendor will open the enterprise market up to its Business Objects, hinting more SAP partners could soon also be getting a crack at the upper end of the market.
To date, SAP’s channel go-to-market has been primarily focused around the small and medium-sized enterprise (SME) space. But speaking in Boston last week at SAP’s annual Influencer Summit, Pat Hume, senior vice-president and head of SAP’s global partner group, indicated partners will soon be getting a crack at the enterprise segment as well.
“SAP is examining its route to market strategy as a corporation, and you’ll see some changes with respect to the role our partners will play across all of SAP in the coming years,” said Hume. “The Business Objects partners in 2010 will sell segment agnostically. We will not focus their energies only in the SME market, but we will in fact open up the entire market to them to help us help our customers get rapid implementation and rapid time to value. We’re really excited about that.
The driver, said Hume, is that both small and large companies are looking for rapid implementation, as well as the local expertise and presence a local partner can provide. SAP is also serious about extending its market reach, and for that it needs a strong channel, supported by the SAP inside sales team working cooperatively to close deals.
“We recognize there is a trend that large customers as well as smaller customers are interested in buying from local partners, because there’s a role they can play to help the company,” said Hume. “Having the expertise, having the deep knowledge to make sure the value is being delivered with rapid ROI and rapid implementation.”
Paul Edwards, director of SMB and channels research for analyst firm IDC Canada, said the market expansion is consistent with SAP’s evolving strategy over the last few years to drive more volume through the business, which will require opening-up a wider market for channel partners.
“SAP is expanding its go to market view with partners to be more volume-based, or at least as volume-based as you can get with things like ERP, CRM and BI,” said Edwards.
Conrad Mandala, vice-president, SME for SAP Canada, told CDN that SAP is committed to allowing partners to play in a more broad arena, and has been focused on defining what that will look like.
“Ideally, what we’re trying to do is allow our partners to play in the area that makes the best sense for them, rather than put structures in place where SAP defines how they buy,” said Mandala. “SAP getting out of the way (of partners) is how we’re going to build this business.”
A multi-channel model means the possibility of channel conflict, and Mandala said that’s something he and Hume have been working hard to avoid. Some of the steps they’ve taken include published accounts and deal registration, as well as using their own CRM system to make sure everyone is communicating effectively. Compensation has also been set so partners and inside sales reps won’t be forced to compete for customers, but rather can work together to structure the deal in the way that is best for the customer.
In Canada, for 2010 all businesses below $500 million will be open to all channel partners, which Mandala said is a fairly simple line to draw in this country as it encompasses the bulk of the market.
“The number of companies above that is a relatively small number,” said Mandala. “Partners can play and even sell into named large enterprises. It’s about bringing the appropriate resource and the appropriate route to market to each customer.”
