QandA: SAP's Troy Targets SMB Through Partners

Last month, enterprise applications giant SAP tapped longtime channel maven Donna Troy to stoke its ambitions in the small and midsize markets. Troy is a well-known figure in the channel with 25 years of experience running global-channel and business-development efforts, including her most recent stint at Network Associates and earlier posts at Tivoli and her own firm, Partnerware.

At SAP, she takes on the title of senior vice president of SAP's global SMB business. In addition to growing market share and crafting SAP's strategy in this potentially lucrative space, Troy will be tasked with developing and managing a global partner channel. She also faces a public-relations challenge to convince partners that notoriously direct SAP is committed to two-tier distribution and the channel as a whole. A day prior to her relocation from Austin, Texas, to Paris, Troy found time to talk with VARBusiness editorial director Robert DeMarzo and senior writer Carolyn April about the road ahead.

Q: So tell us about your decision to join SAP and what opportunities do you see to make it a more channel-centric company?

Troy: I'm really excited about this opportunity, given SAP's brand and to be going after the SMB market. If you do an assessment of where SAP has been, clearly, most of their business partners are integrators to some degree. It hasn't been two-tier distribution and reselling reach for them. I think we have an unbelievable opportunity to do it. With [SAP] BusinessOne apps for small customers, we can really penetrate the $50 million-and-below opportunities and give to the channel. One of the opportunities is to broaden the routes to market. We also want to recruit a solid reseller channel worldwide, and we are thinking about distribution. One of the first things I want to do is map out, candidly, the different routes to market that I want to explore, and expand on the base of partner we have today.

Q: What is the greatest misperception about SAP in the channel today?

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Troy: That it's an enterprise company. That represents some of the work we need to do to focus on SMB business markets. We have midmarket customers. But if you look at the brand, it's bigger than a typical reseller is going to tackle. We have got to put the energy into that not being the case. We want to get those facts on the table. What I would say to partners is, "Don't hesitate to come to us." It's been interesting [since taking this job], particularly the notes I've gotten from people. From partners. They're interested in SAP. They want someone to talk to here. I get these personal notes each week.

Q: What are the notes saying?

Troy: A couple of people wrote who are working with SAP now and who want to expand and do more. But another was a newcomer, who said, "Hey, I saw the announcement about [this or that], and I want to do an extension." One note said that he had 1,000 customers and was looking for other solutions to sell them. It's a great solution opportunity for us. Most of these guys have vertical or horizontal expertise. My singular message is that I want them to come on board. We will recruit and I will look for the right profile. And if people are interested, I want them to pursue us and I want the dialogue.

Q: Unlike what other vendors do, SAP is not positioning you as a worldwide channel manager but more as someone cultivating the SMB marketplace? Can you clarify the role?

Troy: I think the strategy here lies in the fact that the SMB opportunity is very large. And access to that market has to be through indirect sales. SAP's history is a dominance in large enterprises. The real reality of what I am to do is not just to grow an indirect channel, but to grow penetration in SMB, which will be done through the channel. I need to look at programs. My strategy is to go in and scale our SMB piece and that will scale our partner approach.

Q: What will this role allow you to do? Will you direct funding and communication dollars, or have more influence and power inside product organizations and corporate?

Troy: It allows me to look at SMB like a line of business, from solution and market segmentation, to routes to market, to the programs that drive that. It's that kind of a view. I am a general manager role across the whole piece. The end to end. I may look at all options, both direct and indirect. In the upper midmarket, maybe some of that goes direct, but I don't see a pure direct model because it's not scalable. I see a much more hybrid model on reselling side and the integration side. In midmarket accounts, partners do installation and services, but not the full-blown sales cycle. We want to be expanding and building on the partner community that we have there. We are also working with enterprise salespeople, to make sure they understand how to engage partners and leverage them.

Q: To whom do you report, and what does the organizational structure look like?

Troy: I report to Leo Apotheker, who runs worldwide sales operations for SAP. My peers are the other regional heads; there are six of them running each of the geographies. Then the SMB organization has heads who are dotted-line into me.

Q: Since vendors have different ways of defining it, can you tell us what constitutes SAP's notion of the midmarket?

Troy: For SAP, we are looking at companies with 2,500 employees and below. Or another way to think of it is $1 billion in revenues and below. We segment the midmarket from the small, which is defined as below 100 employees. Most of what really determines these companies is buying behavior and their IT experience. Some small companies operate large, others that are bigger seem small.

Q: How are the SMB products sold today? And what is the average SMB customer size for SAP?

Troy: BusinessOne doesn't go direct. But we do leverage it in large accounts using a subsidiary network as our strategy. There are lots of larger accounts that cannot run our more robust offering; they need something easier to install and connect into the back office, and that's [BusinessOne]. For SAP All-in-One, we will continue using the resellers and integrators we have today based on a microvertical approach. This model is skewed toward people with SI capability. We are looking to serve industry verticals targeted at the medium-sized customer who has a complex situation or both a multidivisional and smaller business view.

Q: Are you more interested in a small number of high-value partners or a large volume channel?

Troy: I want the best of both worlds. Through distribution, we can get high-value resellers based on things like requiring technology and sales certifications. I want a high-value channel, not just high-volume. Call it value-added volume.

Q: Are you getting everything you want from corporate right now?

Troy: Yes, a lot of it. I've been here 30 days. I am base-lining now and figuring out what I want to do. I've gotten a lot of support, and it's a great place to be able to have this kind of effect. I felt very good about the commitment before I took the job. [SMB] is a growth opportunity for SAP. It's the spot where there is a large amount of IT spending growth. I am growing my organization and the various regions are putting together their investment plans. We think it's a scaling opportunity that we will drive over the years.

Q: What are your first short-term and long-term goals?

Troy: Immediately: I want to scale the number of business partners and their market penetration. We will launch a global program that scales for partners and allows them to grow with us in the next six months. There's no global program now; it's more regionalized and we want to take it to the next level. That's one of my key areas of growth. And we'll be working on infrastructure as well, like partner-relationship management and other tools. I want to frame all that out early so we can scale fairly simply.

Q: What pressure are you under to lift sales?

Troy: I think there's always pressure to make your numbers. But I think a tremendous asset of SAP is that they take the long view. U.S. companies are so quarter-to-quarter focused, and that can rip off the channel. It's a tremendous issue. Here, there is balance and understanding that you are making a long-term commitment. And that the only way you grow the channel significantly is over the long term. I am the type of person who feels you have to keep your word and have honor in this business, and one thing in the channel is that you commit to what you say you are going to do. You don't change every three months, because you can put people out of business that way. SAP understands that.

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