SAP Readies Major Upgrade To Its PartnerEdge Channel Program

SAP is developing a significant upgrade of its PartnerEdge channel program, streamlining the program's discount structure, implementing a new value-point system for rewarding partners, and designating a number of SAP products that will be sold exclusively through the channel.

In speeches and one-on-one briefings at this week's Sapphire Now conference in Orlando, Fla., SAP executives in the company's Global Partner Operations (GPO) offered some hints about what GPO President Rodolpho Cardenuto, in a keynote speech Monday, called "PartnerEdge 2.0."

The effort remains a work in progress, executives said, with some components of the revamped program nearly complete and others still yet to be developed. The timetable calls for launching the revamped program sometime in the third quarter.

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"It is time for us to move PartnerEdge to the new reality," Cardenuto said in his speech, noting that the current program's core components were developed 10 years ago. That new reality, he said, is Software-as-a-Service and the program needs to reward value instead of volume.

"We're developing a new PartnerEdge, PartnerEdge 2.0, the next generation of our PartnerEdge program," he said, addressing some 800 partners in a summit prior to the start of the main Sapphire Now conference.

SAP has some 13,000 channel partners who service 80 percent of SAP's 291,500 customers. In fiscal 2014, GPO generated 1.5 billion euros (nearly $1.7 billion) in sales, according to Cardenuto. The GPO was created a little more than one year ago, and Cardenuto was put in charge of SAP's worldwide partner operations.

"Without you, we are not relevant," Cardenuto told partners. "Without you, we wouldn't have almost 300,000 customers -- we wouldn't have a fraction of that. Without you, we wouldn't have the business that we have today. Without you, we could not add the value that we [deliver] to our customers."

Channel partners attending Sapphire see the plans for the new program as the latest in many steps SAP has taken in recent years toward becoming a more channel-centric vendor. "It's a work in progress, but they've done a great job," said Arthur Colombo, senior vice president at Answerthink, a Hacket Group Company that's one of SAP's biggest reseller partners.

Colombo said that going back four or five years, SAP was very focused on direct sales in North America. But that culture has been changing, he said in an interview, especially since early 2010, when the company hired former Hewlett-Packard channel executive Kevin Gilroy, now SAP senior vice president of Global Indirect Channels.

SAP "continues to evolve, to become more and more partner-centric and rely more on partner-driven revenue," said Tad Bungener, vice president of GTM strategies at InEight, a Scottsdale, Ariz.-based company that's both an OEM and solution provider partner with SAP.

A key component of the new program will be Partner Select, under which a number of SAP products will be designated for channel-only sales and sold as fixed-price, fixed-scope packages, said Carrie Maslen, vice president of small and midsize enterprises global, in an interview. Maslen reports to Kevin Gilroy, who is overseeing the Partner Select development.

One product that will be included in Partner Select is SAP Business One, the vendor's application suite for small businesses, said Hernan Marino, GPO senior vice president of marketing and communications, in an interview. Today, a great percentage of SAP Business One sales already go through the channel.

Marino didn't disclose any other products that will be included in Partner Select, saying the final lineup is still being developed.

The new PartnerEdge program will include a simplified discount schedule, reduced from the current 15 tiers to five, Marino said, and partner contracts will be more "modular" to allow partners more flexibility -- such as a solution provider who resells applications and wants to expand into mobility, Marino said.

SAP also is developing a value-point system to reward partners for such initiatives as investing in enablement and certification. SAP currently has more than 10 partner types, including resellers, OEMs, partner-managed cloud providers and distributors, and the value-point system will encompass all partner types, albeit with criteria specific to each partner category, Marino said.

"We want to take our most successful partners, who we've been doing business with in applications for years, and bring them into new areas," he said, citing mobility, cloud computing, the HANA database and online ecommerce as examples.

"It's a complete, major overhaul of the program," Marino said. "We're bringing it to the next level."

The expanded program will incorporate SAP's Partner License initiative, announced in February and active in April, which offers partners discounts to purchase and use SAP products in-house. That, Marino said, helps partners become more expert working with SAP software and be their own reference in sales situations.

Partners at Sapphire, meanwhile, gave SAP high marks for its evolving product strategy, including its expanded cloud computing offerings and leading-edge software like the HANA in-memory database platform.

"The way SAP has changed direction is timely, and it's helping us diversify to get into new technologies," said Akhilesh Tiwari, who heads up the SAP practice for Tata Consultancy Services, an SAP systems integration partner. That practice has experienced 30 percent growth, Tiwari said, thanks, in particular, to strong adoption of SAP's cloud applications by TCS customers.