SAP CRM Review
Business ByDesign Reseller Channel Program Started
SAP has announced the early formation of the channel that will support the recently announced Business ByDesign software as a service (SaaS) solution. In addition to the nine Business ByDesign resellers in Germany, SAP has recruited 13 American reselling partners, including Apollo Consulting, Bramasol, Business-First, Clients First Business Solutions, Crossroads Partner, Guidemark Systems, IDS Scheer, Itelligence, Navigator Business Solutions, Netsirk Technologies, Omega Business Solutions, Softbrands and Vision33. All 13 of the SaaS resellers were existing SAP business partners for either its BusinessOne or Business All-in-One on premise products. Many industry insiders remain skeptical about SAPs channel recruitment and SMB customer reach capabilities. "The biggest problem SAP is going to have is with the channel," said Dan Sholler from analyst firm Gartner at the time Business ByDesign was announced. "They need to build a new channel for a new customer they've never reached before. It's a tall order and this channel development is going to be the real key."
SAP Partner Programs
SAP currently has approximately 2,500 channel partners, but has yet to formalize a business partner program for its SaaS solution. With the release of the Business ByDesign hosted solution, SAP also suggested the evolution of a partner channel. In a September 2007 eWeek magazine interview article, Leo Apotheker, Deputy CEO of SAP, based in Walldorf, Germany commented "It is our obligation to create a market for our partners. 2008 is a year we are still testing [Business ByDesign] out, so it will be pushed a little by SAP's (internal) sales force." Other comments at the Business ByDesign announcement suggested that SAP will rely primarily on a direct sales model, however, provide some opportunity for channel members to participate.
It's also possible that SAP may extend its existing Business One and All in One partner programs to the company's hosted solution. SAP supports VAR (value added reseller) business partner programs for its Business One and All-in-One ERP (Enterprise Resource Planning) products. While not exactly longstanding partner programs, the company seems to be making demonstrative progress. In late July 2007, SAP claimed approximately 200 Business One partners and two dozen All-in-One resellers located throughout North America. In the same month, the business partner conference in Washington attracted over 450 partner attendees.
According to one Business One partner, SAP initially raided some senior Great Plains executives to jump start their channel program. The results were mixed as some of those executives worked out and some have moved on (and some reportedly will be moving on).
SAP appears to be in a partner acquisition mode. At the time of the Washington partner conference, the company had acquired 26 Business One resellers and nine All-in-One resellers so far during the year. Somewhat surprisingly, many SAP partners indicate there is room for more partners as SAP works to achieve national and international coverage. For the SAP Business One reseller channel, the partner must join the SAP PartnerEdge program. Partnership generally begins at the 'Certified' level and progresses to Associate, Silver and Gold levels with increased training and progress. Reseller margins are of course aligned with partner level. There is little question that SAP believes their primary channel rivals to be Sage and Microsoft - and seems much more competitive with Microsoft. Unfortunately for VARs, both SAP and Microsoft seem to extend the cold shoulder to partners which also represent the competing product line. A few years ago there were few resellers representing both product lines, however, due to competitive pressures, squeeze on margins and less reliance on the publisher, we're seeing more VARs adopting both SAP and Microsoft solutions.
We couldn't help but notice that most SAP partners appear closely aligned with Microsoft - generally as a Certified or Gold level partner. Perhaps that speaks to SAP Business One's Microsoft-centric technologies (SQL Server, Windows Server, etc.) or perhaps SAP continues to try to pick away at the Microsoft ERP business partner channel.