SAP Builds Reseller Channel For Its On-Demand Applications

ERP CRM the vendor unveiled last month SAP

All 13 solution providers recruited to carry Business ByDesign in the U.S. are already SAP channel partners that resell SAP's BusinessOne and Business All-in-One, the company's on-premise application suites for small and midsize customers, respectively. SAP also has enlisted nine resellers in its native Germany to carry Business ByDesign.

"I see it becoming a big piece of business for us starting around the middle of next year," said Scott McMahon, business development director at Apollo Consulting, a San Francisco-based solution provider that also carries BusinessOne. "I would say one-in-four companies we talk to definitely want software-as-a-service. And I think that will only grow."

As demand for software-as-a-service applications grows many solution providers are adapting their business models to focus more on consulting and business process-related services rather than on software implementation and other technical services. Business ByDesign, coming from a major "traditional" software company, is seen as something of a bellwether for how far software-as-a-service may go and its impact on the channel.

Omega Business Solutions, a Portland, Ore.-based solution provider, is establishing a sales model for Business ByDesign that incorporates its core competencies of administering and adapting information technology to meet its customers' business needs, president Forrest Koch said in a statement about its Business ByDesign plans. The company currently resells SAP's BusinessOne application package.

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"Some of this comes down to CIO philosophy," says Peter Mauel, president and CEO of Bramasol, a Palo Alto, Calif., solution provider, when asked about potential demand for software-as-a-service applications. Bramasol has developed a version of its sports stadium management application that now runs on SAP's All-in-One ERP apps to run with Business ByDesign. The company has a number of Business ByDesign sales in the pipeline, Mauel said.

At the time of Business ByDesign's debut SAP executives said their goal was to have 10,000 customers using the product by 2010. They also said that while the company will rely heavily on its direct sales force to initially market the on-demand apps, the majority of sales would ultimately be made through channel partners. Business ByDesign is targeted at companies with between 100 and 500 employees.

The first crop of resellers to commit to carrying Business ByDesign have signed memoranda of understanding with SAP and are developing business models around the product, according to the company. Most are undergoing sales training on Business ByDesign, including how to position the applications and match them to potential customers' business processes, McMahon said.

McMahon, who has already identified some sales prospects for Business ByDesign, said the product itself is stable. "They put a lot of work into it. It's very different from anything I've seen in the marketplace," he said.

Solution providers that have committed to carrying Business ByDesign in the U.S. include Apollo Consulting, Bramasol, Business-First, Clients First Business Solutions, Crossroads Partner, Guidemark Systems, IDS Scheer, Itelligence, Navigator Business Solutions, Netsirk Technologies, Omega Business Solutions, Softbrands and Vision33.

To carry Business ByDesign in Germany, SAP has recruited solution providers All for One, CIB, Denker and Lenker, Itelligence, Kirbis, Seeburger, Steeb, TDS and Versino.