To draw customers in the now promising SMB market away from archrival Oracle Corp., ERP and supply chain giant SAP AG has launched PartnerEdge, an aggressive partnership initiative that will reward resellers, ISVs and integrators for more than just sales transactions.
"What we have here is a multi-level program that uses a very innovative approach to recognize partners for building business relationships with customers," said Ira Simon, SAP's vice president of global channel marketing, in an interview with The Channel Insider.
The new program will also offer special training and a "jump start" on discounts and other incentives to channel partners who switch their allegiance away from Oracle and other competitors, teaming up with SAP instead.
Beyond the Oracle brand, Simon said he also sees a number of other competitors for SAP, including Oracle's recently acquired PeopleSoft and JD Edwards, and Microsoft [Corp.] Business Solutions.
SAP also faces rivalry in the OneSAP space from Sage Group, Best Software and regional players, according to the vice president.
SAP has been offering SMB (small and midsize business)-oriented partner programs for many years, but PartnerEdge represents the vendor's first "global framework" in this direction, he said.
Announced at SAP's Sapphire users conference on Wednesday in Boston, the new program will also ultimately do away with annual resellers' fees, in favor of a one-time sign-up fee that will be applied to activities such as co-marketing.
But in perhaps its most noteworthy departure from tradition, PartnerEdge will use a system of "Value Points" to recognize the performance of reseller, systems integrator, and ISV partners.
"There are other point-based systems in use today, but the way we [award points] will be different. We will be awarding points for performance in training, customer satisfaction, and developing 'solutions,' [so] we can reward partners for fulfilling [users'] needs regardless of geography and vertical or micro-vertical markets," he told The Channel Insider.
In recent months, a number of industry analysts have pointed to SMBs as a hotbed of activity in the business software market, and to channel partners as the most effective way of selling into this arena.
In a report released earlier this month, for example, AMI-Partners found that SMBs' plans to deploy ERP have jumped significantly from last year's survey, from 3 percent of customers to 19 percent.
"Obviously, there's a lot of growth right now with small and midmarket customers. The model we're using [to reach] SMBs makes sense to us. By and large, smaller companies tend to like to buy through the channel, rather than direct. They want a 'go to guy' who'll help them with their IT needs by supplying localized service and consultation," Simon responded.
"At the same time, there are thousands of SMBs out there, and it wouldn't be scalable or economical for SAP to approach them directly," he added.
SAP, in fact, looks at VARs as part of a "shared wealth creation" model, according to Donna Troy, senior vice president, global small and medium business,
"Are we about volume or saturation? No," Troy said. "Our objective is to build loyalty. We are building an eco-system and it takes time and an investment. I am very empowered by SAP and there is 100% buy-in across the board. Everyone at SAP is in on this," she said.
SAP's new program includes three levels—"Associate," "Silver" and "Gold"—with progressing sorts of incentives in areas ranging from co-marketing funds to discounts and dealer margins.
But SAP will implement PartnerEdge gradually, according to Simon. The software vendor plans immediate rollout for a new Web-based program that will revolve around a partner portal, collaboration, and e-learning.
Full-fledged implementation will take longer, and the timetable will vary according to geographic region. Areas of the world to be targeted as "priorities" include North America, the U.K., Germany, France, Italy, India, Australia and China, he said.
"But in Asia, we might decide to deploy the entire region at once," the SAP executive told The Channel Insider.
SAP also expects to adjust its "global umbrella" somewhat to meet local requirements in various parts of the world, Simon said.
SAP won't replace the existing annual fee structure with the new one-time payment scenario until the program has been fully deployed across the region.
"North America will be one of the first," he noted. Simon expects the North American rollout to be complete—and the new fee structure instituted—at the start of next year.
Elliot Markowitz, editor at large for Ziff Davis Internet's ChannelInsider, contributed to this report.
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