SAP turned some heads with their presence at the CompTIA channel event this week, a presence motivated by an increased new emphasis on recruiting the right type of partner covering SMB customers, in order to double their cloud business by 2020.
AUSTIN — SAP’s focus on the SMB space is not a new one. For years, as trends in the software space began to shift towards SaaS and the cloud, the company has emphasized its commitment to the SMB market, notwithstanding its long association with the enterprise. The company has recently made changes to its channel organization, redeploying resources out of the business units into the channels team.
That’s why SAP is here at the CompTIA ChannelCon event this week, an event that’s a gold mine for journalists wanting to talk to vendors serving smaller resellers, but where the big enterprise players typically are rarer than hens’ teeth.
“Until very recently, you wouldn’t find SAP at ChannelCon,” said Christina Martin Greysman, SAP’s Vice President, Partner Recruitment and Activation. “SAP is here now because we want to take a message to the channel that SAP is doubling down on the SMB market. 80 per cent of our customer base is in the SMB, and we have a rich history there.”
Greysman’s role itself indicates this new commitment. Her position, and that of her boss, Marc Monday, the head of SAP’s North American channel ecosystem, are newly created. While it would not be fully accurate to say the new positions indicate SAP is committing new resources to SMBs, it is accurate to say the resources have been reallocated to emphasize the recruitment of new SMB partners.
“Several years ago, there was a recruiting team, but it was absorbed into the Line of Business units,” she said. “They have broken it out again. SAP took them back out of the lines of business, because we want SMB channel recruitment to move faster. We want to triple our cloud business by 2020, and the only way we can do that is if we are successful in the SMB space.”
Greysman also pointed out that SAP recently tweaked its own internal sales compensation model to encourage SMB channel business.
“We have a partner-first strategy in the SMB,” she said. “With companies that make under a billion dollars in revenue, our direct sales force is tasked with having a partner in every transaction, and they now make more money if a partner is involved in the deal.” That model came into existence within the past year, Greysman said.
SAP is looking for ‘bought into the cloud’ partners who understand the tectonic shifts that are happening in the industry.
“The move to the cloud really began a few years ago, when major vendors – not just SAP – saw where the cloud was headed,” Greysman said. “At that time, many partners who were technologists didn’t really get it, because this was a business market shift. Now, enough customers are demanding cloud, so that many more get it. In net-new recruitment, we are looking for partners who have already bought into the cloud business model.”
Greysman emphasized that while SAP is aggressively recruiting partners, it has to make sense for both SAP and the partner.
“We are looking for synergies around executive alignment and business plans,” she said. “A major issue is whether they are able to build some kind of a unique special sauce solution where they access our APIs and build a specific solution with them.
“The role of my team is to find those partners,” Greysman said.
The ideal new SMB partner will be intimately familiar with the recurring revenue model, Greysman stressed. They should also have expertise in building in their own IP, and a strong vertical or business process specialization. Some partners who don’t want to be a full reseller partner may also prefer a new referral program purpose-built for cloud solutions, SAP PartnerEdge Cloud Choice, which SAP introduced last year. It went from doing five per cent of SAP’s overall cloud business in the final quarter of 2016, to 18 per cent of their total cloud revenues in the first quarter of 2017, and SAP has stated that they expect it to account for the majority of cloud revenues by the end of 2017.
“SAP does billing and collection of revenues, but the partner gets recurring revenue, including on the renewal,” Greysman said.
Greysman came to SAP from Sungard Availability Services, where she spent six and a half years, and built out the partner program there.
“The model at Sungard was entirely recurring revenue, and that was all I talked about with partners there,” she said. “I’m not an SAP expert but I am a channel expert, and I know what partners are trying to do in terms of building a cloud program. As SAP looks for new partners, they need people to bring that channel experience.”
Greysman indicated that the reaction from solution providers at the ChannelCon event has been positive.
“That reaction from partners has been a pleasant surprise, and we really need to do more shows like this,” she said. “They want to learn about what we have. They know that the brand is strongly identified as an enterprise brand, but we are at ChannelCon because we are serious about the SMB space. We want partners to understand our strategy for the channel, and our partner-first focus for SMBs.”