SAP Opens Bigger Accounts To Partners

And, while the company is doing the usual -- drawing up rules of engagement--more importantly, it has committed that its own salespeople will be compensated on sales whether they go direct or through channels.

"It's comp neutral and in some places [outside the US] it will be comp positive," said Donna Troy, senior vice president of Global Small and Medium Business for SAP, Walldorf, Germany. In a comp-positive model, a direct sales rep from the vendor actually makes more margin on a sale going through a partner than if it sold direct.

As most reseller partners will attest, compensation neutrality is pretty much the only way to avoid large channel conflict. No matter how many rules are in place, if a vendor salesperson gets paid more to take a sale direct vs. selling through a partner, that sale will go direct, even if the partner initiates the deal. Oracle's lack of comp neutrality has hurt it with partners for decades.

SAP revealed its plan at its U.S. partner event in San Antonio, Texas, Tuesday and will reiterate it at a series of events worldwide, Troy told CRN in an interview Tuesday.

There will continue to be some "named accounts" in each territory, and sales to those will flow directly. However, if a partner has a pre-existing relationship with one of those accounts, the partner will not be displaced, Troy said. It was unclear how many SAP named accounts there are.

"We are going to open up that whole market," Troy said. With years of experience at IBM and Partnerware, Troy joined SAP in the summer of 2004.

Steve Niesman, the Chicago-based CEO and president of Itelligence America, a longtime-SAP reseller, consulting, and hosting partner, is enthused.

"The compensation alignment means they're serious about growing both their business and our business," he noted from the event. He also lauded the company's evolving PartnerEdge program, which is making it easier for SAP partners with training and other expertise to get credit for that.

"It's a well-balanced program. They base your [certification level] not just on revenue targets but you get credit for training and creating solutions," he said.

Troy also said SAP is working out a set of channel policies or business rules of behavior and is training its personnel worldwide on how to "engage complimentarily with partners."

SAP is attacking what it calls the SME market with a legacy in the enterprise. It needs to up its channel focus to penetrate smaller accounts where it contends with Microsoft Business Solutions, Sage, and (in larger accounts) Oracle ERP solutions, observers said.