SAP's PartnerEdge Bigger than Mendicino and Home Depot Deals

By Elliot Markowitz  |  Print this article Print


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Opinion:SAP made a lot of big announcements during its Sapphire event in Boston, but the most significant was the launch of its PartnerEdge program.

During its Sapphire event in Boston this week SAP AG made public some very big news, including a development deal with Microsoft Corp. that will result in a joint product with Outlook called Mendicino and some big customer commitments such as Home Depot accelerating its technology strategy.

But the most significant of all the software developer's announcements was the rollout of its PartnerEdge Channel Partner Program. PartnerEdge could be the biggest factor in its growth going forward.

While SAP has primarily been known as an enterprise player, the company is going after the sweet spot in the industry—the small/medium business space—and doing it exclusively through the channel with an innovative program designed to reward VARs and integrators for their services and to push them further in this direction.

In a nutshell, PartnerEdge utilizes a unique system of "Value Points," which are rewarded to channel partners for not just SAP-related sales but for competency and services built around customer satisfaction and training. There are three levels of partners—Associate, Silver and Gold—and channel partners can move up the ranks by accruing Value Points.

This is a unique approach to building a loyal channel base, one that encourages building integrated applications and extensions on SAP's solutions. And although licensing sales does play a role, a VAR cannot move up the Value Point food chain on this criteria alone, SAP executives said. This program has real legs.

VARs will be recognized and rewarded by the vendor for their solutions and not for last-minute product pushing to make a quarterly number. What a novel concept.

SAP is also building a Partner Solution Network portal to be used by its channel partners to list their services and expertise and build out micro sites, all in an effort to encourage collaboration and partnering. This will also bring in Value Points. The site will be managed by SAP's Channel Advisory Council, with some functionality to be ready by June.

However, it's not just the program's architecture that impresses me, but also the way the company is approaching the marketplace. While at Sapphire I met with Donna Troy, senior vice president, Global Small & Medium Business; Ira Simon, vice president, Channel Marketing; and Dan Kraus, vice president, SAP Business One, and they all passionately described in much detail the program itself, what went into building it and where it is heading. They are all taking the same language, and what's more, so are their bosses at SAP corporate.

The entire company is completely aligned in this effort. SAP CEO Henning Kagermann talked about it during his keynote presentation, along with all the other big things happening around the company in terms of joint development efforts with the likes of Microsoft, IBM, HP, Intel and others.

Leo Apotheker, president of Customer Solutions for SAP and board member, hammered the point home during a global press conference saying: "[PartnerEdge] is built on a foundation of programs we have. It's a good time to shift gears and take it to the next level." He went on to say that the program's "framework is to help business partners" and offers rewards for long-term customer relationships. "Our intent is for our partners to make money, to focus on quality and not quantity."

I have to tell you, this is a breath of fresh air. Hearing this clear concise message from the powers-that-be at SAP corporate is a big shot in the arm for the company's channel development effort.

This is also important because the company is building this channel plan from scratch. The benefit is that it does not have to redo or correct anything, but it does take time, money and patience. Marketing, support, training and even the technology infrastructure are all important investments that need to be made on the front end before any ROI is realized by the company. Having the support of corporate SAP goes a long way in giving the channel executive team the time and resources it needs to successfully build PartnerEdge. This is not lost on these executives by the way.

"Are we about volume or saturation? No," said Troy. "Our objective is to build loyalty. We think of the channel as VCs. We are building an ecosystem, and it takes time and an investment. I am very empowered by SAP, and there is 100 percent buy-in across the board. Everyone at SAP is in on this," she said.

With this type of support, SAP should have the necessary time and resources to build an effective SMB channel. Now it is time to execute.

In addition to being editorial director of Ziff Davis eSeminars, Elliot Markowitz is also editor at large of Ziff Davis Internet's The Channel Insider.

Elliot Markowitz Elliot Markowitz is Editorial Director of Ziff Davis Media eSeminars responsible for the editorial content of all eSeminars. Markowitz is a 14-year publishing veteran and was previously Editor-in-Chief of CRM Magazine and the destinationCRM.com website and related live events. Before CRM Magazine, he was Business Editor at TechTV, responsible for helping to manage the TV station's website as well as conducting live on-air interviews with key industry executives.

Markowitz also spent 11 years with CMP Media's award-winning weekly newspaper Computer Reseller News (CRN), where he held many key editorial positions including News Editor, Business Editor, and Senior Executive Editor. In 1999 he was named Editor of CRN, responsible for the entire editorial operation of the newspaper and in charge of coordinating its redesign and re-launch in June 2000. While at CRN, Markowitz initiated many key alliances including the Industry Hall of Fame event in Las Vegas and the annual CRN/Raymond James Conference. Early in his career Markowitz was a news reporter on Long Island for the Massapequa Post.

He holds a B.A. in journalism from Hofstra University and is a graduate of the Stanford Professional Publishing Course.

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