SAP’s Gilroy bullish on channel growth

SAP channel chief Kevin Gilroy

SAP channel chief Kevin Gilroy

It’s been almost three years since Kevin Gilroy took the helm of North American channel operations for SAP, and a lot has changed since then.

For one thing, Gilroy’s role has evolved – he’s gone through a number of changes, most recently arriving as the company’s global channel chief. And for another thing, he feels SAP has arrived as a real presence in the channel community.

“Our strategy is totally consistent – the course we plotted more than two years ago was to take a company from being relatively direct-centric to being a balanced company, and to do that in a scalable, programmatic way,” Gilroy said, reflecting on his journey with the German software maker.

That journey has largely focused on building a sense of “channel DNA” into the company – not an easy task for a company that welcomed him aboard with at least one instruction not to “turn a small, unprofitable channel into a big, unprofitable channel,” Gilroy said.

In reality, SAP’s channel business wasn’t really unprofitable prior to Gilroy – although his organization made changes to reduce the costs of pre-sales support for partners (backing partners up with SAP staff for the first few calls to get their feet wet, then turning it over to them) and enablement (creating a cohesive program from what Gilroy describes as “a Frankenstein with new pieces sewn on every year for 20 years.”) But it was misunderstood.

“Looking at the channel is not something you can do anecdotally or you get conflicting data,” Gilroy said. “If you don’t have fact-based analysis, you end up with people saying ‘the channel is our most profitable business,’ and others saying ‘the channel is hugely dilutive.’”

The company ramped up with veteran channel executives, including high-profile additions from HP, Cisco, IBM, and elsewhere, and got a real feel for what the channel meant to it. Gilroy knew he had attained his cultural goals when the conversation shifted at its quarterly business calls. Early in his time at SAP, Gilroy admits, those calls with top SAP leadership were “all about direct, all about the big deal.”

“But that’s completely changed,” he said. “It’s fun hearing our senior executives asking all the right channel health questions.”

The company has stated its goal of doing 40 per cent of its overall business through partners by 2015. But Gilroy believes that’s a conservative figure.

“We’ll beat that, absolutely. Hands down,” he said.

And it’s easy to see where that confidence comes from. At the beginning of the year, the company was doing one third of its business through the channel. And today, it’s doing “a little better” than 33 per cent.

Gilroy, a channel veteran from his time at HP, admitted that he faced a lot of questions through his first year or more at SAP. The channel had seen SAP, and many other vendors before and after it, call on the channel opportunistically, only to retreat to direct at a later date. In SAP’s case, they’d seen that happen a few times. Solution providers, quite reasonably, wondered why they should believe the story this time around? Gilroy said that three years of sticking with the approach have helped ease many of those fears, but for those who are still concerned, he offers the same advice he has given out from the beginning.

“I’ve told channel partners that they’ll have an early warning system if things are changing, because they’ll see me exiting the situation,” he said. “I’m not going to be an apologist to the channel for SAP.”

But today, he’s not in apologies mode. Rather, he’s reflecting on getting a second chance at creating a channel renaissance within a company.

“I got to do this once and HP, and now we’re got another tipping point here with SAP,” he said. “I’m lucky”

Robert Dutt

Robert Dutt is the founder and head blogger at He has been covering the Canadian solution provider channel community for a variety of publications and Web sites since 1997.