One-Third Of SAP's Sales Are Now Through The Channel5:31 PM EST Fri. Nov. 30, 2012
Channel partners are now handling 33 percent of SAP's sales, putting the giant software vendor within range of its goal of making 40 percent of its sales through the channel by 2015.
That number is likely to continue growing given that small and mid-size enterprises (SMEs) make up 88 percent of SAP's net-new customers -- many of which are serviced by SAP's growing channel partner ranks.
"We understand the SME market," said Kevin Gilroy, SAP senior vice president, global indirect channels, speaking at an "SME Summit" the software vendor held in its New York office Thursday.
[Related: Gilroy: SAP Now Has 'Channel DNA']
Also attending the summit was SAP co-CEO Bill McDermott, who disclosed SAP's SME and channel sales numbers during a panel session examining the current status of startups and small businesses in the uncertain global economy.
While SAP was once better known for selling enterprise applications to big corporations, SAP has been placing greater emphasis on SME sales in recent years and has been beefing up its channel programs as part of that effort.
A key element of SAP's SME push is the series of Rapid Deployment Solutions SAP began developing two years ago. The RDSes are pre-packaged application modules bundled with industry templates, best-practice methodologies and implementation tools offered on a fixed-scope/fixed-price basis.
Today SAP offers 150 RDS packages, and sales have exploded, said Jeff Winter, SAP marketing vice president, at the SME Summit. Some 1,700 customers have purchased 2,500 RDS products with mobile, cloud and business analytics packages the proving to be the most popular.
The Rapid Deployment Solutions have also been a popular item among channel partners: Winter said 43 percent of RDS sales in SAP's third quarter were through VARs, implementation partners and hosting partners -- up from just 5 percent one year ago.
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Delaware Consulting, a Belgium-based solutions provider, is one of the partners that's taking advantage of the RDS offerings. The company is developing sales and plant maintenance applications for mobile devices based on SAP's mobile platform and mobile applications RDS packages.
"We can deliver a pre-packaged solution and deploy it very easily," said Yoeri Coessens, Delaware Consulting manager, speaking at the SME event. Noting that such fixed-scope/fixed-price offerings are popular among small businesses, he said the RDS products "are a good go-to-market strategy. It contains all the technology and information in one package."
Orchestra, a Portland, Ore.-based Microsoft Gold Partner, is having solid success developing solutions for "micro-vertical" industries on SAP's BusinessOne Cloud set of applications. Orchestra's solutions rely on BusinessOne for about 80 percent of their functionality with Orchestra developing the remaining 20 percent for such industries as microbreweries, restaurants and "downstream" petroleum companies like distributors and gas stations, said Orchestra President Brad Windecker.
Orchestra became an SAP partner in 2008 at a time before the vendor was as committed to the channel as it is today, Windecker acknowledged in an interview at the SME Summit. But, Windecker chose to go with SAP, saying the company recruits fewer, higher-value partners compared to Microsoft. "That's what customers are looking for," he said.
PUBLISHED NOV. 30, 2012