Four VARs: So Long, SAP

“Partners leave vendors every day,” said Michael Sotnick, senior vice president of Small and Midsize Enterprise, SAP America. “This story is resellers incapable of winning value and receiving a return on their investment—and a frustrated vendor and frustrated reseller parting ways.”

Not surprisingly, Sage and Oracle would make much of these defections. But the reasons for the shift in allegiances go beyond the politics now roiling the hotly contested enterprise applications space. It&'s also a question of focus, available resources and vendor channel maturity.

Take ERG and Practical Software, which have become Sage Select partners, a designation that carries higher margins and co-op percentages. Among the first to sign on to sell Walldorf, Germany-based SAP&'s Business One, both also had a long history selling Sage&'s accounting packages. And for a while, both continued to offer Sage and SAP products.

“We had Sage and SAP conferences to attend, weekly communications with each group, two account executives and two sets of managers. We didn&'t have enough bandwidth to deal with two major publishers,” said Vince Stamey, CEO of Practical Software, Concord, N.C. Given its place in Sage&'s President&'s Circle for the previous three years, the company chose to devote itself to Sage. “We&'ve seen our revenue grow 30 percent to 40 percent compared to last year, just because of our ability to focus on one vendor,” said Stamey. “It&'s too easy to spread yourself too thin when you work with these big publishers.”

ERG, Dallas, also had “resource issues,” said Greg Boyd, president and CEO. “Last year, we were in the middle of growing our MAS 500 practice and were really seeing a huge amount of opportunity with it. In fact, we got so busy with our MAS 200 and MAS 500 efforts that we ended up with only four SAP customers.”

Another factor: “They are really in startup mode, and we felt that lack of maturity,” said Boyd. “I guarantee you they will be a player in this space, but we had to make the decision to focus, given our resource challenges.”

Issues become more complicated in the midmarket, where SAP goes head-on against Oracle&'s J.D. Edwards line. That&'s where CD Group, Atlanta, and Corning Data Services, Corning, N.Y., play. Longtime J.D. Edwards partners, each sought to diversify with SAP All-in-One to hedge against uncertainties stemming from PeopleSoft&'s—and then Oracle&'s—acquisitions. What changed? Oracle wooed them with a vengeance, enabling them to sell to companies with $500 million in annual revenue, opening access to the installed customer base, delivering full-scale support in the field.

“Oracle asks us for our knowledge of what works and doesn&'t work in the midmarket,” said John Walczack, vice president of software solutions at Corning Data Services. “The commitment we&'ve seen to our success is second to nothing I&'ve ever experienced.”