SAP partnership key element in Square channel push

Square, which built its business on simple point-of-sale solutions for microbusinesses, is moving upmarket, and partnerships like their new integration with are putting them in touch with an integrator channel for the first time.

Last month San Francisco-based Square and SAP concluded a partnership that will integrate Square’s innovative point-of-sale solutions into SAP . The integration is a significant one for SAP customers, who will have access to Square’s payments processing capabilities now, and to their capabilities around electronic invoicing, e-Commerce, and Virtual Terminal bill payment later in 2018. The integration also is significant to Square’s go-to-market strategy. The integrator channel has previously not played much of a role for them. However, the more aggressive partnering strategy brings them into much closer contact with the channels of their partners.

High-flying Square has been in business a little over eight years. It was founded by Jack Dorsey, the CEO of Twitter. After going public two years ago, Square is now worth more than Twitter.

“Jack discovered that a large portion of the U.S. economy couldn’t get credit card payments accepted because they were micro-businesses who were deemed too small for the service,” said Antonio Silva, Platform Partnerships Lead at Square. “Even now, eight years later, it’s still very hard, and it’s expensive, so many people can’t or don’t do it. Square developed a card reader for this market that would plug into an iPhone and start processing credit card payments.”

The majority of Square’s 2.5 million customers today are still micro-sellers. Many of them have grown beyond that, however.

“A good example would be Blue Bottle Coffee, which started in San Francisco in the equivalent of a farmer’s market, and then became a brick and mortar location, and now have multiple locations,” Silva said. “These types of businesses evolved, and needed more than basic point-of-sale service, so we evolved as well, adding features like inventory management capabilities, and building out a complete suite of point-of-sale solutions. Two weeks ago, we launched Square Register, a fully integrated software-hardware point of sale solution that lets you sell without the need for tablets or apps.

“The fastest growing segment of the market today is the one that does above $500,000 in business annually, and includes many multi-location businesses who want more features,” Silva added.

The SAP integration greatly improves Square’s ability to reach these more upmarket sellers.

“This partnership allows our point-of-sale capability to be fully integrated in the SAP Business One back end,” Silva said. “It is focused on Business One today, but we plan to expand that in the future.”

The SAP integration also signals a change in Square’s go-to-market strategy. Until now, they have sold direct, but partnerships with other ISVs also expose them to those companies’ reseller channels.

“SAP is very successful because of their channel partner ecosystem,” Silva said.  “For us, partnering with them means partnering with their ecosystem – engaging with the SAP partners and working with them.”

It will be part of a broader go-to-market strategy through ISVs and their integrator channels.

“Our channel is just coming in now, around these eCommerce platform partnerships,” Silva said. “It’s part of our omni-channel strategy. We want to power commerce through all these other channels, which will also help us grow upmarket.”

Silva indicated that Square wants to be selective about the reseller partners it does sign up, and forge deep relationships with them.

“We don’t want to just sign everybody up,” he stressed. “We want to make sure that the partners we work with are successful, which we can’t do if we sign up hundreds and hundreds. We will be able to scale more later, as we grow.

Square has fifteen such relationships today.

“We will be working together with these partners, engaging with them, particularly starting in Q1, and getting some diversity with them in our go-to-market,” Silva said. “We have been listening to what they want from this kind of solution, and the simplicity of Square – that it just works, like consumer devices.”

“Two of our Business One customers are already working with Square around point-of-sale,” said Korey Lind, CEO and founder of Third Wave Business Systems, an SAP Gold partner. “All of our customers are going to market in multiple channels now, so integrating with the Square is very helpful to them.”

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