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SAP is dropping its requirement that solution providers pay 50 percent of software license purchases up front and the company has instituted a "comp-neutral" compensation model for its sales representatives to eliminate channel conflict.
The giant software vendor also is committed to spending the equivalent of 10 percent of this year's channel sales on channel marketing initiatives. And the channel will take the lead in going after 4,600 "large enterprise" prospective customers in North America, a change from SAP's current practice of largely restricting resellers to small and midsize customers.
Those and other new policies unveiled at this week's SAP Channel Partner Summit in Savannah, Ga., are the latest evidence that SAP, which until recently emphasized direct sales with little channel participation, has been aggressively stepping up its channel efforts.
"To me this is a direct indication of how SAP is serious about working with its partners," said Prashant Jain, senior vice president at Sparta Consulting, a Santa Clara, Calif.-based gold partner in the SAP PartnerEdge program, specifically referring to the new comp-neutral plan and other organizational changes he said will help partners work with SAP sales and staff. "Now the mandate is very simple: Everything flows through the partner. That's huge and an indicator of a long-range change."
The latest changes follow the company's decision in August to drive 100 percent of its small and midsize enterprise (SME) sales through solution providers. They also follow significant changes in SAP's management ranks, including the appointment of Robert Courteau as president of SAP North America and the appointment of Eric Duffaut as president of global ecosystem and channels -- elevating channel management to the president level for the first time within the company.
Today the channel accounts for about 20 percent of SAP sales in North America and the company hopes to double that to 40 percent within a few years. "We've set out some really aggressive goals as a company and we want to grow our channel, and we're putting those goals on our general managers," said Courteau, who was named president of SAP North America last month, in an interview.
In keynote speeches and interviews at the partner conference, attended by more than 560 solution providers, SAP executives repeatedly spoke of the need to leverage channel partners to expand SAP's customer base at both large businesses and fast-growing small companies.
Next: Improving Channel Partner Cash Flow
