Last spring, without a lot of public fanfare, SAP integrated two of their core SME-focused business units. Their SAP Business One offering had typically been sold to SMBs, while SAP Business ByDesign had been typically aimed more at midmarket customers, as well as those with a cloud-focus, because while Business One works in the cloud, Business ByDesign was made for it. The objective in merging the units was to improve the synergies between them. A key goal there was to get more Business One partners selling Business ByDesign. With more than half a year’s experience in the books, the company is pleased with the results.
“In April, we made a major move by combining our two organizations into a single one,” said Luis Murguia, Senior Vice President: SAP Business One and SAP Business ByDesign, who before April was Senior Vice President and General Manager of Business One.
“The rationale was that Business by Design had too much focus on the enterprise and large companies, and we were missing opportunities under that,” Murguia indicated. “We believe that we can win with new customers in the SME market with Business ByDesign, by taking the best both from it and from Business One. We can win with new customers there.”
In the new organization Murgia and Michael Schmitt, who was previously Senior Vice President and General Manager of Business ByDesign, became co-leaders of different parts of the combined portfolio.
“I run the combined field operations for Business One and Business ByDesign,” Murguia said. “Michael runs Business One and Business ByDesign development, support and product management.”
“We now have one product management team, and one innovation team, for both areas,” Schmitt said. “It allows us to drive as much as possible through the system.”
Murguia said that the traditional division between the Business One and Business ByDesign customer sets has become increasingly blurry, particularly given the ability of Business One to serve larger customers than it has in the past.
“Business One with HANA lets us do bigger and bigger projects, and the deal sizes and contract sizes have been increasing year-over-year,” he stated. “We can address a much bigger range of customers than in the past. More and more Business One partners are entering cloud opportunities as well.”
Murguia noted that the Business One reseller base – 700-plus VARs around the world – is an extremely engaged one.
“75 per cent of every VAR does at least one Business One deployment every quarter,” he said.
A key objective of bringing the units together was cross-pollination between them, particularly by getting more Business One partners to sell Business ByDesign.
“It has paid off,” Murguia said. “In the first three quarters this year, Business ByDesign grew the number of new customers by 42 per cent. In April, when the units were combined, we had 31 Business One VARs selling Business ByDesign, and now we have 75. For Business One partners looking to scale into the cloud, Business ByDesign is the perfect solution for that.”
Schmitt noted the success of Calgary-based VistaVu Solutions, which works with field service companies, particularly in the oil and gas industry, in both the Canadian and American oil patches.
“They were the second largest Business One partner in Canada,” Schmitt said. “They adopted Business ByDesign near the beginning of the year, and quickly ramped up a new practice. They have been repeating the success that they had with Business One.”
Schmitt said that this is the model they are hoping to see more of going forward.
“We want partners to copy the success that they have had with BusinessOne with Business ByDesign,” he said. “Both are well suited to the micro-vertical industry approach, like with wineries and microbreweries, and partners who use both Business One and Business ByDesign and have a vertically-focused go-to-market strategy are having success here. Leveraging the Business One ecosystem for Business ByDesign can lead to great success.”
“From a channel perspective, this has been terrific,” said Marc Monday, SAP’s Vice President North America and Head of Channel Sales. “There’s a lot of overlap between the two solutions, and it gives the partner the ability to become a one-stop shop for the SMB/SME customer. The partner can do an assessment of what the customer needs, and lead with the solution rather than a product.”
Further integrating and enabling the channels for the two products remains a top SAP goal going forward.
“The SMB Innovation Summit, which in North America will take place next June, will emphasize the development of Business ByDesign skills,” Murguia said. “Partner enablement here is the number one priority in 2019.”