SAP's Kevin Gilroy: 45 Days on the Job
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 structure.
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.