Channel Insider content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More.

Just shy of two months on the job at SAP,
Kevin Gilroy has had some time to take stock of the software company’s channel
organization, weigh its strengths and weaknesses, and begin putting together
strategy and goals for the year ahead.

One directive is clear: When it comes to SAP
and its partners, the name of the game is mutual accountability, said Gilroy,
who spoke with Channel Insider this week in one of his first interviews since
joining the SAP team. Translation: SAP
will step up and do its part, and partners better do the same.

Named in January as vice president responsible for leading the channel and
business development functions within the SAP
small and midsize business organization in North America, Gilroy has had a long
history in the channel: twenty-five years at HP, including a stint as their
channel chief; CEO gig at OnForce; president
of the Enterprise Computing Solutions division of Arrow Electronics; and, along
the way, a private, channel-focused consulting business.

On paper, SAP looks to be a different
kind of animal than the places Gilroy
has worked in the past: an enterprise applications giant with a direct sales
lineage and checkered track record selling indirect. Compare that to HP and its
army of hardware-based, high-volume partners. Surprisingly though, Gilroy
says the differences are minimal.

“The biggest surprise is that things aren’t that different. Partnering is
partnering,” he said.

And there’s no question that SAP is
starting to take the channel seriously, with hires like Gilroy’s
a case in point. In 2009, the company generated 52 percent of its revenue
through partners, up from 34 percent in 2008. Part of the credit goes to the
acquisition of Business Objects, the BI giant that joined SAP
with an already seasoned channel organization in place. SAP
executives will readily admit that Business Objects’ channel savvy has served
as a solid model for the rest of the company as it builds out its partnering

From Gilroy’s perspective, SAP
owns some clear strengths—ones that attracted him to the job in the first place—and
sports obvious areas that need improvement (or as he describes the weaker
links, “upside opportunities”). On the plus side, he touts SAP’s
product quality and breadth and cites the company’s keen understanding of the
sales process and insight into the target customer and how they buy IT.
“There’s a discipline and cadence to the company,” he pointed out.

Where does SAP need work? From a brass
tacks perspective, the company’s deal registration program needs to be
streamlined, conversion rates need to come up, and the cost of sales needs to
come down, he said.

At a higher level, Gilroy said SAP
needs to adopt a clearer understanding of how solution providers run their
businesses and view profitability. The reality is that while the income
statement is vitally important to partners, it’s the balance sheet that they
worry about on a day-to-day basis. Basic cash flow. To that end, Gilroy
says developing a partner program that finds a way to shorten time to revenue
for partners should be a goal.

But it’s not just SAP that has work to
do. Gilroy is expecting partners to
step up as well. That mutual accountability thing. He cited a perennial weak
spot for the majority of solution providers in the channel today: marketing.
Even some of the largest solution providers from a revenue standpoint do not
take marketing seriously, he said; many are even unwilling to hire a bona fide
marketing professional. There’s an over-reliance on events-based marketing, he
added, and going forward partners need to be willing to make investments that
drive sustained demand. He likewise advocates joint dashboards tracking
pipelines and deal progression that SAP and
its partners share. And lastly, he wants to convert a current crop of SAP
partners that only provide implementation and consulting services into true
sellers of the software as well.

At the end of the day, it’s about winning new business.

“I don’t want to just take [market] share. I want to rip it away from our
competition,” he said.

I don’t think partners will have a problem with that.