SAP Bolstering Midmarket Channel

Reminiscent of IBM Software Group's recent reorganization around vertical industries, the SAP Business One Solution Partner Program aims to recruit ISVs to develop industry-focused applications for SAP Business One. Introduced to the U.S. market in March 2003, the SMB suite comprises core enterprise applications--including CRM, accounting, warehouse management and purchasing--for companies with up to 500 employees.

SAP said it expects ISVs will add tightly integrated applications, enabling, for example, online sales, logistics, data management and advanced warehousing for specific industries. SAP said it would ensure the quality of add-on applications via a "rigorous" certification process.

Metamor Enterprise Solutions offers an example of the kind of niche functionality SAP wants to attract. For six years, the Fountain Valley, Calif.-based software vendor has offered its Quickwear system, running on SAP R/3, for the apparel and footwear industry. Quickwear helps companies deal with the vagaries of seasonality, the permutations of color and size by width and length and the complex pricing and global sourcing aspects of the industry. Eleven months ago, Metamor released a version for the SMB market.

"I have never had such support from SAP as I do today working with the SMB channel," said Mike Donnelly, Metamor's vice president. "They really are superb in helping us go to market to the apparel and footwear customer. Companies in this market tend to be family-owned concerns with narrow margins--different characteristics from a normal SAP customer."

Business One partners will receive a software development kit, training and various levels of marketing and "other" support, depending on partners' size and degree of involvement in the program. SAP solution managers will help ISVs design, develop and--if necessary--integrate a solution with Business One, said Gary Fromer, SAP vice president of SMB and hosting.

Of course, SMB solutions require a channel that can reach midmarket customers. SAP said it now has 65 partners trained and selling Business One in the United States and expects to have 150 to 200 U.S. channel partners by the end of next year.

"We had our Field Kick-Off Meeting (FCOM) this week in Las Vegas, and the number of feet on the street was double that from this time last year," said Fromer.

Kevin Smith, president of Accountant's Software Services, Yucaipa, Calif., was among the attendees. The solution provider, which is also a Microsoft Great Plains channel partner, has carried Business One since August. At the meeting, Smith and others in SAP's channel universe met SMB software vendors. It was a chance for SAP to play matchmaker. "Because of FCOM, we have closer relationships with the ISVs that participated," Smith said.

"It's been phenomenal working with SAP," Smith added. "They are not interested in the number of software boxes we can move, and I've never encountered that before in 20 years. Instead, they are interested in having successful partners and customers. No other vendor has made me feel that they care as much about the success of my business."

The European giant on Thursday did make one announcement commensurate with its impressive size: It reported record earnings of 1.1 billion euros for the full year--an impressive jump from 509 million euros in 2002. The company said it expects software revenue to grow about 10 percent in 2004, after a 6 percent decline last year.