Software sales are not as profitable for the channel, generally, as they used to be. How does SAP, the world's largest business software company, plan to grow sales of its increasingly diverse application portfolio?
Robert Furnivall, head of channel at SAP UK, said its partner restructure completed late last year – which saw its UK stable of 145 fall to 92 – is already paying dividends. In Q1, SAP saw growth of 130 per cent year on year.
“We had quite an aggressive process of removing and changing the status of our partner relationships. The reason we did it was to focus on those that are delivering revenue. Others were removed or converted into referral partners.”
Furnivall sees “an awful lot” of opportunity for SAP expansion this year, particularly around partnerships focused on Business Objects. And the vendor wants to go on making it easier for partners to sell its tools and applications.
“I also think we will see quite an increase in channel marketing,” he said. SAP also wants more partners to expand their involvement, particularly around providing its business intelligence on demand, launched in June.
SAP is now once again seeking to add partners, but in a more focused way. The vendor is looking at engaging a VAD for the UK and Ireland in the second half of 2010, and has already started negotiating with at least one.
Mark Weir, ecosystem and recruitment partner manager at SAP, added that the Business Objects acquisition is helping SAP broaden its appeal to smaller companies. SAP has largely maintained the Business Objects partner network – and now those customers can scale seamlessly up to enterprise software.
“We are now getting feed-through of customers sitting right at the bottom of the SME stack,” Weir said.
And the channel is increasingly important, Weir said.
Tim Noble, managing director of SAP UK and Ireland, said the vendor believes customers are now refocusing on business growth, using new technologies and social media to speed things up. The future of business applications is increasingly on-demand and on-device.
“Businesses need to access information, connect with suppliers, serve customers, make decisions and take actions any time, anywhere, from any device,” he said. The idea is to use advanced offerings to make that possible without disrupting customer businesses.
IDC MarketScape in May reported fierce competition in 2009 among integrators of SAP based business applications.
Ali Zaidi, senior analyst for consulting and systems integration strategies at IDC, said SAP services providers should offer a full SAP range globally and have deployment capabilities around key functional areas. Pricing should boost adoption, and they should be selling SAP alongside other offerings, with an eye to cloud, Software as a Service, or distributed global delivery.
“Opportunities for improvement include increasing the SAP talent pool and offshore presence, scaling up SAP managed services and business consulting practices for some, and enhancing pricing structures and models,” he said.
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