SAP Launches Business One To U.S. SMBs

Solution providers interested in partnering with SAP, traditionally a direct company focused on the enterprise, should not expect a formalized channel program anytime soon, said Gary Fromer, SAP's vice president of small and medium business, at the official U.S. launch of Business One in New York City on Thursday. Instead, SAP will work with select solution providers, giving them what they need in terms of training and marketing funds, as well as technical and field support, on a case-by-case basis, he said.

"I'm really not interested in programs," Fromer said. "We will have a personalized relationship with our solution provider partners."

SAP will use American Express Tax and Business Services (TBS) as its flagship solution provider to help build its channel, executives said. TBS, which currently uses about a dozen solution providers to help service its small and medium customers, plans to recruit about 60 solution providers over the next 12 months to focus on Business One implementations, said Gerry Golub, senior managing director of the division. TBS is also a Microsoft partner, which SAP will be competing with in the CRM space.

SAP in January announced its intentions to offer a U.S. version of its Business One suite of ERP applications for small- and mid-sized businesses. The product is based on code SAP gained through its acquisition of Israel-based Top Manage. The software is designed to be implemented in less than a week and includes modules for contact management, pipeline management, order management, general ledger, and logistics and distribution. (See related story.)

Some solution providers question SAP's ability to crack the small and medium business markets. "When people think of SAP, they think of applications that manage the monolith and they think of complexity," said one solution provider. "I think SAP will have a hard time in this space."

But Korey Lind, president of Third Wave, a small solution provider in Elmwood Park, N.J., which was recruited by SAP to sell One Business, said the company is hiring people with channel experience to administer the new channel and, so far, has given her the support she needs. "That way, they don't have much of a learning curve," said Lind, who closed her first Business One deal about an hour after Thursday's launch. "I've been impressed with how quickly they've been able to get things done."

Using its 50 regional offices as recruiting stations, TBS will create an American Express branded version of Business One and will develop Business One applications for vertical markets, Golub said. The division will be in charge of administering and managing its own solution provider program, Golub said, while SAP will build its own channel.

The software will be priced at $3,750 per user with a three user minimum, according to SAP. Margins on the American Express branded product could range from 30 to over 50 percent, depending on the implementation, Golub said.

SAP would not reveal the margins under its program, nor would executives discuss the monetary and personnel commitment they're making to support the new channel. TBS and SAP will distribute Business One. They are also kicking off an eight city, east-coast tour next month to promote the product.

We want to make (solution providers) part of the SAP team," said Bill McDermott, CEO and president of SAP America. "At the end of the day, if you see how we're running the company, we're very focused on opening up a partner channel."

Barbara Darrow contributed to this story