SAP Walks the Channel WalkBy Elliot Markowitz | Posted 2005-03-21 Email Print
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Opinion: Every once in a while a vendor realizes it needs VARs and solutions providers to grow its business and reach tough markets.
Just like everything else in life, there is always a right way and a wrong way to do something.
This obviously applies to vendors looking to build a qualified, loyal and effective solution provider channel.
A lot of vendors talk the talk, but we later find out they have no intention of walking the walk.
Over the past 15 years I have watched hardware and software manufactures alike try to put the right building blocks in place for a strong channel presence.
Many, including Microsoft and Novell (in the early years), succeeded.
Others made missteps along the way. When it tried to go direct into accounts at the expense of its channel partners, Apple offended the education resellers that were the bread and butter of its business. Compaq tried to build a direct presence at the expense of its channel, and it too failed.
Both efforts left the channel bitter.
Breaking into an account is hard enough for VARs; finding out you are competing the very same vendors you are representing is bad business.
Similarly bad are manufacturers that will authorize and certify anyone with an 800 number, a service technician and Web site, with little thought to saturation, margins or even what value-added services can be built around their products.
Authorizing just anybody to sell your goods can be more damaging than going direct, because one sub-par channel partner can ruin the market for all solution providers representing a specific vendor.
But every once in a while a vendor gets a strong dose of channel religion and realizes it needs VARs and solutions providers to grow its business and reach tough markets, especially small and midsize businesses.
Making that strategy work means targeting the right VARs and giving them the right toolstraining and sales supportto be successful.
Enter SAP, which is methodically trying to build its channel presence across North America with a goal of doubling its VAR partners this year.
The vendor is taking a tiered approach and offering financial incentives and support programs to make Business One, SAP's ERP (enterprise resource planning) product line, the focal point of its VARs' business.
SAP's initiatives center on supporting its channel and arming it with services and direct access to SAP representatives.
The company is not about to authorize every Tom, Dick and Harry. It is painstakingly going through applications to make sure the VARs in its channel are strong in expertise and not just strong in numbers, company sources tell me.
As part of this, VARs who are less dedicated to SAP will receive fewer incentives from the vendor in terms of co-marketing funds and lead generation.
But to build trust with the channel, a vendor must have trustworthy executives.
Here, too, SAP has made some bold moves and brought in familiar channel faces.
Steering its channel push is Michael Sotnick, senior vice president for SMBs (small and midsize businesses) at SAP America.
He is the former head of channel development at Veritas Software.
SAP also brought in Donna Troy, who was appointed senior vice president of its global small and midsize business initiatives last July and spent 25 years in the channel, most recently as executive vice president of worldwide channels at Network Associates Inc.
Bringing in Sotnick and Troy to help develop SAP's channel and SMB strategy was an important first move by the vendor.
The company automatically gets channel credibility with these folks.
Targeting the right quality VARs is the important second step.
Adopting a tiered approach and developing deep support, financial incentives and education programs is where the company will ultimately make its mark and build channel loyalty.
So far, SAP is talking the talk, we will soon know if it walks the walk.