Page 2 of 3
SAP recently had a meeting for its sales representatives in Las Vegas where Courteau emphasized that expanding partner sales is an executive priority. "What we're seeing right now is a big opportunity for business transformation," Courteau said in a keynote speech. "For us it's about getting to new customers. And that's why the channel is so important."
That theme echoed throughout this week's Channel Partner Summit. "We're looking to more than double the number of net-new customers on an annual basis," said John Schweitzer, senior vice president of business analytics, in a keynote speech focusing on SAP's business analytics product plans. "We are committed to transforming our business and we're going to start with business analytics. The channel strategy is key for us long term."
Channel partners applauded the elimination of the 50 percent down payment that was required for software purchases up until just last week. Under the old policy resellers had to pay SAP 50 percent of a software purchase order when they signed a contract with a customer. That meant the reseller had to ask customers for the money upfront or pay it out of their own pocket and take a hit to their cash flow.
"We identified that as a choke point to growth," said Kevin Gilroy, senior vice president of ecosystems and channels for SAP America, in an interview. He said that generating $1 of growth requires between $1.20 and $1.25 of working capital and the 50 percent requirement was hindering partner efforts to expand.
"We're happy not to have to take the cash flow hit," said Nir Orbach, CEO of Illumiti, a Richmond Hill, Ontario-based SAP gold partner, in an interview at the conference. "It's helping us to free up cash flow and helping us to grow the business." The money can now go to marketing efforts and developing new services and training programs for customers, he said.
"It's only logical that SAP show some trust in their partners," said Yves Neron, vice president of sales and marketing for Forgestik, a Outremont, Quebec-based SAP gold partner. He recounted being in the uncomfortable position of signing customers to new contracts, then immediately having to ask for a check to cover SAP's 50-percent requirement.
Orbach also praised new marketing and demand generation services SAP will roll out for partners in the second quarter, including online marketing and volume telemarketing assistance. SAP America is also committed to spending 10 percent of North America channel revenue on those and other marketing efforts, said Michele Weber, vice president of ecosystems and channels marketing for SAP North America, in a conference keynote speech.
Another goal of that initiative is to get partners to invest more resources in their own marketing and demand generation efforts, Gilroy said, adding that some partners are "under-invested in marketing."
Next: Opening Up Large Accounts To Resellers