The Wizard Behind SAP's Channel CurtainBy Elliot Markowitz | Posted 2005-07-13 Email Print
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Opinion: Channel companies usually have something to complain about when it comes to vendor relations, but that is not the case with SAP's channel strategy.Imagine a world of cooperation instead of cutthroat competition. Imagine a world where your vendor partner provides you with all of the marketing, training, certification and SDKs to enable you to properly represent, sell, deploy and customize the software platform you are selling and building solutions around. And imagine a world where end-user customer satisfaction takes precedent over low-margin, volume sales.
After living in the channel universe for the past 15 years, I didn't believe such a world existed. Through the years, I have attended IBM, Hewlett-Packard, Microsoft and many other solution-provider events, and there were always a certain number of resentful channel partners there who were not happy with their current lot in life.
If you hung around the hotel bar area long enough at any of these events, you would no doubt be involved in a conversation with a VAR who was complaining about cuts in market-development funds, end-of-quarter sales pushes, direct competition or just the quality of the free food. That was par for the course and life in the channel as we all knew it.
I did finally crack one guy who let loose. Apparently his biggest problem was that there was a master switch in his hotel room, and while trying to charge his cell phone overnight, he accidentally shut off the power. Oh, the humanity! Sorry, Daniel, the cat is out of the bag, and I hope SAP doesn't pull your authorization as a result of such harsh comments. At least I didn't reveal that your last name is Carr and that you are president and CEO of Computer Decisions International.
So, was the water everyone was drinking spiked, or is SAP onto something here? Still not convinced, I found one business partner who is also Microsoft Certified. It even says so very prominently on his business card. I was sure this guy was going to crack under my rapid-fire questioning.
After about 30 seconds, he confessed that a few years ago, two-thirds of his business in the business-management software space was Microsoft-related. I got it, I thought. Then he continued, saying that now two-thirds of his business is SAP-related and growing, and just one-third is Microsoft. I won't reveal his name to protect the guilty.
After further prodding I discovered, as with the majority of the conversations I had, that there wasn't so much a problem with Microsoft's solution provider channel strategy, but rather that SAP offers much more long-term services potential.
"There is more services opportunity with selling SAP to SMBs [small and midsized businesses]," said Rob Delf, a partner with Tryarc LLC. "The average rollout is about three months and starts with about five users, usually in the financial department of an organization. Then after the company sees the way it has changed the business, they want to roll out the solution companywide," he said.
Every channel partner who spoke with me hammered this point home. I began to believe there really was a wizard behind the curtain at SAP. And doling out a brain to a scarecrow, a heart to a tin man and courage to a lion is nothing compared with making channel partners happy. But much like the movie, the wizard at SAP is really just plain old common sense and acting accordingly.
SAP's channel partners feel empowered right now. The company is providing an affordable, quick and easily deployable BPM (business process management) solution for its channel partners to supportone that usually begins with a small rollout in a company's financing department and more often than not ends up spreading across all facets of the organization, resulting in higher customer satisfaction and future services business for the partner.
And that is really what the secret is. Future services opportunities will always win out over a volume sales game. So in my view, SAP's channel team is well on its way to Oz, but there are still some perils that might come along the way.
As the company authorizes more channel partners and the market gets more saturated, there is the risk they will start stepping on each other's toes. That will have to be monitored very carefully. Also, the great attention being paid to each partner is bound to start decreasing as more enter the fold, and SAP has to remember its channel pioneers as its network grows.
And finally, the Value Point system is a great concept but will not be rolled out for another six months, and many partners still are unsure of how this higher form of mathematics is going to work. To me, that is where the ruby slipper meets the Yellow Brick Road.
Elliot Markowitz is editor at large at The Channel Insider. He is also editorial director of Ziff Davis Media eSeminars. He can be reached at Elliot_Markowitz@ziffdavis.com.