ORLANDO – Turns out Thomas Wolfe was wrong, and you can go home again. That’s the experience of Scott Jones, SAP’s recently appointed Head of General Business, SAP North America, who now performs the North American channel management functions formerly executed by Kevin Gilroy. Speaking at SAP’s Global Partner Summit here, Jones doubled down on the recent SAP themes towards the channel – that it is core to their SME strategy, and thus, key to the company’s whole growth strategy moving forward.
This was SAP’s largest Partner Summit to date. Over 2000 partners registered for the partner event – a sharp uptick from last year when approximately 880 showed up. While three-quarters of this year’s bounty came from North America, they represented over 60 countries in total.
“SAP has 300,000 customers – which is one third of one per cent of the total SME addressable market,” said Rodolpho Cardenuto, SAP’s President of Global Partner Operations. “Without our partners, we are not relevant.”
Cardenuto indicated that SAP added 7,725 net new SME customers in 2015, and a further 1542 in Q1 2016, over half of whom came through partners. 45 per cent of the growth was in the U.S.
“Our goal is to triple business in the next five years – with North America growing disproportionately fast, and receiving of half our total revenue investment,” he said.
Jones, a long-time SAPer, left the company three years ago for more responsibility as the North American sales VP at business intelligence vendor Tableau, where he oversaw all routes to market, including channel. However, while SAP eventually succeeded at developing an SME-oriented channel (following several earlier failed efforts over a decade ago where they lacked the right solutions for the space), Jones noted that his former employer – like many vendors in this space – haven’t been able to make a channel breakthrough.
“At my old company, we had a big problem with channels,” he said. “We just could not get channels off the ground, particularly where it’s really important, with what happens on the street with customers.”
Jones said that one of the measures they took to address the issue there was a day-long brainstorming session with senior management.
“We got 15 of our top executives together on how to jumpstart the partner business, and we started by having everyone write down why we wanted a partner business in the first place,” he said. “13 of the 15 said it was so partners could bring incremental business to the company. That perspective was the problem. At SAP, it’s what do we do together with partners to make sure our customers are successful.”
Jones stated that he thinks SAP has three key advantages moving forward – the company’s culture, the value SAP provides to the C-level and the boardroom, and the presence and impact of SAP HANA.
“At SAP, the partner piece of the ecosystem sits right in the middle of the value chain,” he said. It’s critical that partners effectively leverage their knowledge of the SME space to give that market the specific type of solutions they want.
“SMEs want the buying experience to be simple,” he said. “They want to ‘try before they buy’, in small nuggets. They want short ROEs – typically 1-3 years. Most are cloud-only, not even cloud-first. It’s important not to engage them in an old school way. For example, you cannot go in with a services proposal that is like on-prem. You have to be nimble and very flexible.”
Cardenuto also told the audience SAP’s 2016 channel priorities, which begin squarely with S/4 HANA.
“Our priorities start with S/4 HANA Cloud Edition, in all flavors,” he said, noting that the channel audience is responsible for over 50 per cent of all S/4 HANA sales.
“We will have not only the product but the business model to service our customers,” and noted that this would be backed by the forthcoming new Cloud Business Partner Program.
The second area of emphasis is on the public cloud, through SAP Ariba, SAP SuccessFactors and SAP Hybris.
“We will focus on specific markets, and will develop very specific programs, again, which will be tied back to the Cloud Business Partner Program that we are developing,” Cardenuto said. “We will package, price, enable and support very specific templates for those industries.”
Cardenuto said the absence of any clear leader in the SME space makes it ripe for a super-charged effort by SAP.
“The leader in SME has a five per cent market share,” he said. “It’s a very fragmented market. With S/4 HANA, SAP Ariba, SAP SuccessFactors and SAP Hybris, we have the best solutions in the market, backed up with packaging, pricing, enablement and support and our partners adding IP.”