SAP Canada isn’t exactly telling its Canadian channel to go cloud or go home, but they are strongly emphasizing that the cloud is the future for SAP, and that top partners who don’t see that and adjust their solutions mix accordingly will likely be replaced at the top by other partners who got with the program.
When Rob Stevens took over as channel chief for SAP Canada in April, he wasn’t shy about telling the company’s on-prem focused partners that cloud is SAP’s future, and that it really needs to be their future as well. Since then he has been forcefully stressing that message to SAP’s top Canadian partners, telling them that increased demand for SAP’s cloud solutions means that if they don’t ramp up a strong cloud presence, they likely won’t continue to be one of those top Canadian partners.
“In Canada, I have 39 VAR partners, but 80 per cent of the business comes from nine of those partners,” Stevens said. “A lot of those nine have come from a traditional ERP background. But the market is moving to cloud as line of business applications like hybris become more important. Our partners of the future will be building practices around hybris and other SAP cloud solutions like Arriba, Concur and SuccessFactors.”
Stevens said that the changing cloud reality will inevitably shake up the top of SAP’s partner pyramid.
“Will it be same top nine partners a year from now, or will some be replaced by other partners who have invested in SAP’s cloud businesses?” he said. “Top partners need to be generating these kinds of opportunities rather than consuming them, and increasing their cloud mix as opposed to on-prem.”
This message isn’t being delivered in a subtle manner.
“What has been evident over the last six months is that many partners are still stuck in that traditional on-prem world,” Stevens said. “When we talked with those top nine partners, we found that not all of these are cloud-savvy. We are giving them a clear statement that this is where the business is going. Some of our more successful partners now are the ones building cloud businesses. They wouldn’t have made our top nine before cloud. We are highlighting to our top partners that you are in the top today, but if you don’t go down that cloud path, you will be supplanted.”
Stevens said that of SAP’s 39 Canadian partners, perhaps 30 have the potential to get into that Top 9 if they make the right choices and execute on them. He also said that adding to the top partners by authorizing U.S.-based partners in Canada isn’t the road he wants to travel.
“I’m very hesitant to bring in any new partners, and don’t want to just authorize US-based ones in Canada,” he said. “That’s not really the approach we want. We want to build a bottoms-up approach on Canadian-based companies.”
Stevens said that to encourage top Canadian partners to invest in cloud, SAP has made a commitment to give them a monthly ranking of where they stand against their peers.
“We’ve taken a double click on the business so that they know where they stand, and are doing joint planning to make sure they see the broader story,” he said.
This has included getting together with all nine of these partners in the same room for a two day session.
“This is something that I have seen work in the past,” Stevens said. “This kind of gathering provides momentum and courage for people to speak up. It’s also useful for them to know we value their opinion as a group as well as individuals. Putting them all in the same room, so they hear the same conversation, gives us a level of insight we wouldn’t have gotten if we hadn’t done that. Certain partners made extremely valuable points and others piggybacked on top of that.”
Stevens said SAP gleaned significant knowledge from this event about their brand awareness in certain markets, as well as questions that partners are being asked by customers.
“We learned a lot about the conversations that people are having, and the ramifications of the CIOs not having full control of budget and needing support from line-of-business groups,” he said. “We also got feedback on what our execution looks like. For example, they wanted to know when inside SAP passes a lead to them, where accountability started and stopped, and how to best organize things to facilitate four-legged sales calls.”