SAP creates new division to serve smaller firms

SAP detaches SMBs from SMEs in a new organization which will give their on-prem focused VAR partners new opportunities with hybrid and cloud solutions.


Dean Mansfield, President, SMB Solutions Group, SAP

SAP has launched an SMB Solutions Group, a new division targeted at the sub-500 employee market. It will be led by Dean Mansfield, who served in several senior sales roles over a long tenure at NetSuite, a company with which he will be competing head-on in his new role.

“Last year I was recruited to SAP to help them with their cloud strategy and simplification message with customers, and help in the SMB market, where they had been successful in on-premise solutions,” Mansfield said.

It was decided that making SAP successful in the SMB beyond its on-prem Business One solution could best be achieved by tackling it with its own separate organization.

“The 20-500 person market was previously bundled in with the SME strategy, and we decided that best way to give it the focus and attention it needs was to put it in its own division,” Mansfield said.

“My view of this market is SMBs have a unique requirement, in that they are typically underbudgeted for IT and see it as an inhibitor to their business,” he added. “We are not going to be trying to redefine ERP or CRM products or anything like that for them. We will try to create a business environment redefining the business application market, where now in SMB these tend to be very disparate, and with zero business intelligence. There has to be a better way. We will create next generation apps for them, do what Gmail did to Exchange for the masses.”

None of these new solutions are available today, but Mansfield said they are coming.

“Whether these are existing products downscaled or new products is being discussed right now, and no firm decisions have been taken,” he said. “But it will all be on the HANA platform, and it will have an HTML5 front end. The specific application layers we are evaluating now and are in the process of deciding. We are also adding new engineers to build on this platform. We are investing heavily in driving this forward.

“We don’t have a product today, but we do have a vision, and we will put it into effect in the coming months and years,” Mansfield added. “We are engaging with the market to understand what those issues are that need to be solved, and how to build not just a solution but an overall business engagement model that solves those problems. We will also absolutely continue to invest and grow our Business One product portfolio. This is all in addition to that.”

Mansfield said how the offerings for SMBs will be branded has not yet been decided, and that’s an issue they are presently considering.

“We do want to make sure the experience is just as good,” he said. “Removing complexity is the biggest inhibitor for small business. We also need to make sure the cost profile is right. I think solutions where you pay for what you use will resonate with this market.”

Mansfield said SAP is better positioned to deal with the market issues here than anyone else in the space.

“The way the cloud vendors approach the market is refreshing, but it doesn’t solve the holistic issues small business faces, where they are in a competitive environment where they need to be enabled by technology,” he said. “Compared to these companies, we have internal assets like HANA that we can leverage. We have a whole array of solutions to create an internal hybrid offering which provides a fully integrated solution. We also have global coverage, scale and data centres everywhere, which gives us the ability to execute on scale.”

Whether the SMB market will be entirely served by channel partners, or whether they would also be supplemented by SAP has not yet been decided.

“No decision has been taken, but I strongly believe this market is best served by channel partners, because they have the local coverage,” Mansfield said. “I think there is room for some kind of hybrid model, of coselling, or validating leads, or a more modern approach like an app store. We are evaluating all of these. Partners will, however, play a very big part in whatever it is that we do. These new hybrid strategies would be new for our channel partners, although it’s not new for the industry. For some partners it will be a different delivery methodology, so it will be an addendum to what they do now, but it won’t be substantially different from what they do today.”

Mansfield said these changes reflect the way the whole industry is moving, and are in the interest of partners themselves.

“This enables the channel to give customers an alternative solution,” he said. “What we are looking to do here is give partners more opportunity and a different methodology to go into the market.”