SAP Channel Chief Opens Up on 2010 PlansBy Carolyn April | Posted 2010-02-01 Email Print
Pat Hume, senior vice president of SAP’s Global SME Channel, detailed a number of initiatives and changes to SAP’s channel partner approach, most notably the company’s goal to have 100 percent of new SME business to go through the channel.
While Oracle made it clear last week that it is placing its bets on a much more direct-sales go-to-market strategy in the wake of its acquisition of Sun Microsystems, rival SAP is moving in quite the opposite direction. Long-known for its enterprise-focused direct-sales machine, SAP over the last couple of years has been ratcheting up its investment in the indirect channel and is touting 2010 as the year to open up the available market opportunity to even more partners.
In an interview with Channel Insider, Pat Hume, senior vice president of SAP’s Global SME Channel, detailed a number of initiatives and changes to SAP’s channel partner approach, most notably the company’s goal to have 100 percent of new SME business go through the channel. In 2008, 32 percent of SAP’s SME revenue flowed through partners; the percentage for 2009 is expected to have climbed to 52 percent, Hume said.
Previously, SAP defined the SME market as comprising deals worth $300 million and below, and confined partners to that threshold. However, as part of the channel changes being made this year, SAP has raised the SME ceiling to deals of $500 million and below. That’s the universe the company wants to be handled 100 percent direct, Hume said. The only exceptions will be in cases where partner coverage is lacking, she said. For example, if the deal called for a partner with pharmaceutical industry expertise at a specific geographic location and that partner just didn’t exist, SAP would take the business direct.
These changes reflect an ongoing mindset shift inside the company to recognize the necessity of a robust channel, she said.
"When I joined [SAP two years ago], I said there was a lot of work to do to really get SAP to embrace a commitment to channel," she said. "Now when we tell partners about going 100 percent direct, we resolve conflict and demonstrate through real proof points, we got the message across. Our go-to-market makes sense, and the fact that SAP corporate recognizes the value of multichannel is highly indicative of their trust in our partner community."
From an investment standpoint, SAP recently hired channel executive veteran Kevin Gilroy to head up its North American channel organization. Gilroy, who among other recent roles was a longtime channel chief at HP, will be tapped with several key initiatives, according to Hume, among them recruitment of new partners in industries and subregions that need coverage. The goal is not to build a high-volume channel, however, but rather one that consists of a smaller number of value-added partners, she stressed. In order to cultivate these partners, Hume has instructed Gilroy to raise the bar on channel management activities.
"We want to make sure we are giving them the support they need to stay loyal," she said.
Additionally, Hume said she has asked Gilroy to spend some time focusing on the $100 million and below market, where SAP sees untapped customer opportunity. Part of succeeding there will be to nurture a subset of partners that are more transactional in nature, she said, which is not the typical SAP partner today that is largely consultative and focused on system integration.
Other moves in 2010 include moving SAP’s volume distribution business under Hume’s purview. Her group will now be managing relationships with the broadline distributors, including Tech Data and Ingram Micro, as well as the DMRs that largely handle fulfillment of SAP’s Crystal analytics products picked up in the $6.8 billion acquisition of Business Objects in 2007.
From a programmatic standpoint, SAP is simplifying the means in which partners earn value points and access MDF dollars, she said. These changes are a result of feedback from partners."We are listening," she said.