SAS' International SMB Effort: So Far, So Good

It's been nine months since SAS Institute launched its reseller program in the United States in an effort to penetrate the SMB market, and so far the initiative is on track. Last month, the business intelligence software developer expanded the program to resellers in 13 countries and added more BI software bundles tailored for small and midsize companies.

Under SAS' latest plans, the channel program has been expanded to resellers in Canada, England, France, Germany, Switzerland, Sweden, Italy, South Africa, Russia, Japan, China, Australia and India. The company already has enlisted more than a dozen solution providers internationally, including Syncer and Odesys in France, Morse in England, Prowerks in Canada, DiSo in Switzerland, and BPS and OctoPlus in South Africa.

"It's a global challenge and a global opportunity," says Miles Mahoney, vice president of SAS' global alliances and channels group. As the company builds up its infrastructure to support channel partners in countries such as China and India, Mahoney says those efforts will also lead to new enterprise accounts for SAS. "Therein lies a greenfield opportunity for us," he says.

Selling its sophisticated data analysis and information management applications to SMB customers through indirect channels is a big change for SAS, a privately held company with 2006 sales of $1.9 billion. While sales generated through the new reseller program remain a tiny piece of that, channel partners and industry watchers say the reseller program is expanding according to plan.

SAS has recruited 62 resellers in the United States, Mahoney says, and those channel partners are servicing more than 100 customers. The company continues to target VARs that work with other business intelligence software vendors, such as Business Objects and Cognos, and platform vendors, including IBM and Hewlett-Packard. The company hopes to boost its reseller roster to 160 by the end of this year with about 100 in the United States and 60 split among Europe, the Middle East and Asia/Pacific. SAS' goal is to have between 250 and 350 resellers generating 15 percent of new license revenue by the end of 2008 and 20 percent of new license sales by the close of 2010. The company ultimately expects 50 percent of its channel sales to come from outside the United States.

SAS is letting resellers handle all sales to customers with revenue of $500 million or less and such channel conflict-avoidance efforts, combined with a deal registration program, are major incentives for partners.

"They've got defined rules of engagement and they enforce them. As a reseller, that's very important to me," says Charles Burke, president of The Normandy Group, a Cincinnati-based solution provider. He also praised the vendor's support, education and marketing collateral services.

"I think they've started out on a good footing," says Paul Edwards, a software channel strategies analyst at IDC. He says the challenge for SAS will be keeping costs in line as it expands the program beyond North America, England and France into countries where the company currently offers fewer programs to support its partners. But he says devoting resources such as free training for channel partners, as well as letting resellers keep a share of subscription renewal fees, which account for 80 percent of SAS' revenue, shows the company's commitment to its channel strategy.

Along with expanding the channel program geographically, SAS is offering more preintegrated software bundles that it sells exclusively through channel partners to midsize businesses. SAS' new lineup of nine product packages includes SAS BI for Midsize Business, SAS Data Integration for Midsize Business, SAS Desktop Data Mining for Midsize Business and SAS Forecasting for Midsize Business.

The bundled applications are the biggest attraction for some channel partners, such as Miami-based Qualex, which allows resellers to offer SMB customers sophisticated BI applications for 40 percent to 50 percent lower than typical enterprise-class BI software, says Ray Bower, business relationships manager at Qualex. n