SAP Doubles Down To Dominate SME Market Opportunity

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SAP is doubling down on its small and medium enterprise offensive, recruiting new partners in a bid to create a new class of solution provider millionaires delivering SME-focused solutions to millennial-run businesses.

"We are doubling, tripling and quadrupling down going after SME in a very big way around the world," said SAP Senior Vice President & General Manager, Global Small and Midsize Enterprise Segment & Indirect Channels Kevin Gilroy in an interview at CRN parent The Channel Company's headquarters in Framingham, Mass. "We already have a beachhead. No supplier in our space has more than single-digit market share in SME. It is very fragmented. We think we can take market share in a very large way."

Gilroy, a channel veteran who has led partners to big profits in a number of treacherous market transitions over the past several decades, expects the SME offensive to drive double-digit compounded annual growth rates, creating a new class of SAP SME-focused solution provider millionaires in the process.


"We think we are going to make a lot of channel partners extremely wealthy over the next five years," said Gilroy. "As we double this business every two and a half or three years, there will be channel partners that get on board with our portfolio of cloud, mobility, big data, database and ERP products, and the valuations of their businesses are going to double and triple. With cloud and recurring revenue, valuations are going to go through the roof. Channel partners that are on board with us are going to be absolutely delighted."

SAP already has 203,500 customers in the SME market segment. But now it is investing even more resources to bring new partners on board and providing lucrative marketing MDFs for partners to use to win new customers.

The new SAP SME offensive on what it sees as an $88 billion market opportunity comes after the company has bulked up over the past several years with a new class of SME cloud and SME on-premise-based solutions. SAP acquired commerce software maker Hybris last year, and in 2012 made two blockbuster deals, acquiring human resources cloud software maker Success Factors for $3.4 billion and ecommerce cloud software provider Ariba for $4.3 billion.

Those deals and internally developed SME-focused products such as SAP Business All In One have changed the character of the company, once considered purely an ERP software giant for Fortune 1000 companies. All of the SAP cloud and SME product activity have more than doubled SAP's addressable market in the SME segment, said Gilroy.

NEXT:SAP Targets Millennials To Drive SME Sales Growth


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