SAP Moves to Simplify Cloud Transactions

When it comes to the cloud, SAP executives have made it clear that the channel is a core element of its overall strategy. Now SAP is aiming to make it simpler for channel partners to make that transition by providing them with the option of having the company manage cloud transactions on their behalf.

A new profit option in the SAP PartnerEdge Cloud Portfolio allows SAP partners to use the company’s extensive billing capabilities to manage cloud transactions. Rather than being a requirement, the program is designed to eliminate the overhead associated with cloud transactions, said John Scola, vice president of global cloud channels and transformation for SAP.

“We’re always looking to provide partners with new options,” Scola said. “We see this as a way to attract new partners who want to get their feet wet.”

The degree to which any partner will want to manage customer transactions varies. Many potential partners don’t start up a cloud practice because they don’t have a financial system in place to process transactions based on software subscriptions.

In general, SAP is looking to partners to help combat rivals, such as Salesforce, Microsoft and Oracle, in the midmarket. One of those partners, Steve Niesman, president and CEO of itelligence, a solution provider that has been working with SAP since 1989, said that given SAP’s dominance over enterprise applications, the company often doesn’t get the credit it deserves for working with partners.

“There are a lot of old myths about SAP and working with partners in the midmarket,” said Niesman. “The truth is that 80 percent of SAP’s business comes from the midmarket.”

Niesman said itelligence already works with 6,000 SAP customers in 25 countries. The secret to working with SAP, he added, is making sure your organization adds value in the form of, for example, vertical industry templates and other forms of unique intellectual property. At the same time, however, Niesman also applauded SAP for now sharing cloud software revenue with the partner versus leaving it to the partner to make money on services alone.

SAP is clearly locked in a titanic struggle with a host of rivals as it tries to move the majority of software it sells and supports into the cloud. The difference between winning and losing that battle clearly has as much to do with the number of customers that SAP can reach through partners as much as it does the quality of the software it provides.

Mike Vizard has covered IT for more than 25 years, and has edited or contributed to a number of tech publications, including InfoWorld, CRN and eWEEK. He currently blogs daily for IT Business Edge and contributes to CIOinsight, Channel Insider and Baseline.