For SAP’s Kevin Gilroy, the to-do this year is a familiar one: “Busting the myth that SAP software is cumbersome and complicated and expensive.”
SAP, in fact, has a channel-partner strategy to help carry that message, and the SVP of SAP’s North American SME business is tasked with helping to further build and enhance it. More than three-fourths’ of SAP’s customers are SMBs, which SAP defines as $500 million in revenue and under. Total percentage of sales through the channel— through Business One Business All-in-One software, Business ByDesign and SAP BusinessObjects software is sold —sits at around 20 percent. The hope for SAP is to grow channel sales to 40 percent by 2015—the same year SAP predicts it will hit 1 billion users.
To spur sales along, a host of new initiatives have been launched. For example, the time to become a reseller has been shortened from at least a year to a couple of months at most (SAP can enable Business ByDesign partners in just a couple of weeks). A newly formed “Experience Team” has set to work streamlining and simplifying customer contract processes. As such, a standard financing document that used to take two weeks to process has been shortened to two pages, and now takes an hour.
Long-time partners, two of which have been with SAP since it implemented its channel strategy in the early 2000s, say there have indeed been significant improvements to the program—including better partner training, customer technical support and an enhanced PartnerEdge portal where new and existing partners can find information on the products and the program.
“They’re listening to the partners,” said Bertus Jacobs, who leads Illumiti’s Business One program. Illumiti is an SAP channel and implementation partner based in Toronto with 70 Business One customers.
There are fewer partners to listen to these days. At one point in the United States, there were between 160 and 170. Now it’s down to between 70 and 75, said Carl Lewis, general manager of Vision 33 TotalCare, recently named SAP’s Business One Partner of the Year. In most channel structures, that would not be a good thing, but one of the things that has made SAP different is its focus on a smaller, stronger channel.
But there is a downside. There aren’t as many people marketing the products across the county as there might be in a large channel like, say, Microsoft’s. And while marketing has improved and is continuing to do so, SAP’s ability to deliver on the commitment to helping resellers generate leads has been less than ideal, many resellers say.
“The ongoing, polite tension between SAP and the resellers is that they want us to hire more people. We think we can sell more with the people we have if we had access to more leads,” Lewis said. “SAP does a lot of brand-based marketing, and that’s OK, [but] we have to learn how to take advantage of that. I wish there was more collaboration.”
Jacobs agreed that while marketing support has improved—for instance, SAP awards marketing development funds based on sales and pre-defined SAP templates for marketing—most of the marketing is brand, not product, specific.
“I think Business One probably needs to have a little more specific marketing,” he said. In particular, Lewis says there’s not as great of a commitment to generating leads for Business One as there is for Business ByDesign. Lewis would know. Vision 33 sells both products. It’s not as if SAP’s apparent favoritism toward Business ByDesign is entirely misdirected. To say there’s interest in SaaS in this market is a vast understatement. Jacobs said he goes up against NetSuite in deals often and says that they will likely become Business ByDesign resellers as well. (He is in wait-and-see mode because the product was just released in the Canadian market.)
A benefit of being a reseller of Business ByDesign and Business One is that Vision33 has two really good products, Lewis said. Business One, which is very mature, is full featured and customizable, and Business ByDesign, offers sort of “the perfume of the day,” Lewis noted. Vision33 is carefully moving forward with that suite, selling it mostly in professional services and wholesale distribution. And if a lead is generated for one but the other product fits better, then customers have a choice.
That choice is important. Not only is Business One a very mature and customizable product that many of its 70 resellers have nearly a decade of experience implementing. But with the cost of hardware dropping, there is still the open-ended question about whether SaaS investments actually offer a lower total cost of ownership in the long run for every type of company.
After all, as Lewis filled me in, Business One was originally purchased when former SAP executive Shai Agassi was on board (it was his father’s company). A primary target for it? Subsidiaries of larger customers. Business ByDesign is being pitched at that space now.
As for SAP’s part, Gilroy said it has brought in a new leader of marketing who is working on building out marketing programs together with the channel partners, which will manifest in blogging, television ads, and opt-in programs such as demand and lead-generation packages. In turn, 10 percent of revenue from the channel and partner side of the business will go back into partner marketing programs. Plus, Gilroy said they’re putting “1,000 feet” on the street to sell the products.
For resellers, those feet, along with their own, can’t move quickly enough.
“You need to move much quicker than you have to move in the large enterprise space,” Jacobs said. “You’re talking directly to the owner of the company. Smaller organizations turn on a dime and move in a different direction.”