SNP, a German software vendor that makes automated transformation software for SAP environments, is expanding its presence in North America, and transitioning from its former direct model to do that.
Heidelberg, Germany-headquartered SNP is not well known in the channel. That should be no surprise, for a year ago, the company, in business for over a quarter century, had a negligible channel presence. SNP has also been much stronger in Europe than in North America, but they are looking to change that. Thomas Rosinski was named president and managing director at SNP Americas in October, with a mandate to build up that North American business. His background at firms like IBM and PwC has been working for or with systems integrators, and his plan is to significantly expand the business here by leveraging that channel, including global, national and regional integrators.
“SNP has been around 26 years, mainly focused on the German-speaking [DACH] and European market, and tightly focused around the SAP ecosystem,” Rosinski told ChannelBuzz. “SAP instances were typically organized by country or by business unit, and when people merged SAP instances together, we would integrate them together. We would also handle divestitures.”
Over the years, SNP has executed over 12,500 SAP projects, and like SAP itself, has switched its focus to S/4HANA.
“We have developed software to migrate to S4,” Rosinski said. “Projects are typically either new green field deployments or brown field adaptations We use the term BLUEFIELD for a hybrid between the two, where we provide automated transformation to what are often very complex projects.”
Their customer base includes the expected ones – large enterprises with very complex SAP environments – but they are broader than that, particularly in the utility market.
“In North America, we do have large customers like Dow, but we also work with some smaller utilities which need to bring their history, which brings us into play,” Rosinski indicated. “We work with large utilities and small ones as well. If a company wants to leverage their previous investment, and doesn’t want to spend $150 million on a green field deployment, they look to us to see how they can still transform strategically, without having to redesign fundamentals like manufacturing and distribution. Our software really does benefit any size company today, especially as more people migrate to S4, since the price is 1/20th that of a green fields project.”
SNP’s expansion of their North American presence, and their shift to the channel are related, although the channel shift is also the result of the company’s decisions about its strategic direction.
“We decided at the board level that we want to be known more as a software company and less as a services company,” Rosinski indicated. “Globally we were maybe 30% software and 70% services, and we want to reverse that. By getting partners engaged, it changes that model. It changes how we go to market, and our pipeline has perhaps tripled because of it.”
This coincides with the building up of SNP’s business in North America, where Rosinski is determined to use the channel to accelerate growth.
“In North America, SNP had more of a slow start into the market compared with Europe,” he said. “I just became president and managing director in October, and I was tasked to build up the partner practice in North America, leveraging my past experience with the different systems integrators.”
The result is that the channel business in North America is projected to go from almost nothing a year ago, to about half in 2021.
“Our objective in 2021 is to get 50% of sales in North America through a partner,” Rosinski said. “For comparison, it was 5% in 2020. Q1 looks like it will be around 60% through partners.”
The channel strategy is focused on systems integrators, but it includes national and regional integrators as well as the large GSIs.
“The bigger ones do get the lion’s share of the big SAP products – but we hit all three types: GSI, nationals and regionals, for all sizes of projects,” Rosinski indicated. “One that we approved today has three different partners on the RFP, two of them smaller and one larger. We actually have been working with some regional integrators longer, such as West Monroe out of the Chicago area.”
Rosinski also noted that many of the relationships with integrators are complex because of the integrators having multiple practice groups which relate to SNP’s business.
“We work with cloud channels within the SIs, and their SAP practices, and the M&A groups,” he said. “We have Google, AWS and Microsoft working with us and bringing us deals – usually the more complicated ones involving very complex SAP systems.”
Rosinski compared their partner base to a Gartner Quadrant.
“The upper right is our strategic partners,” he said. “We have two that think of us almost every time they get a deal. With them, we have pipeline reviews and joint Go-To-Market. Below that is a quadrant of more tactical partners. DeLoitte is one of these. We don’t do a pipeline review, but any time it’s a small company and a divestiture, Deloitte brings us a deal. The upper left is accounts that collaborate with us, but which are more opportunistic. Some of these are brand new as well.”
Rosinski emphasized that SNP’s reversal of position on the channel has made strong relationships possible.
“In the past, when we were direct, the integrators thought of us as a competitor,” he said. “Now we are emphasizing that this is in the past, and that we want to work with them and help them. On the other hand, there is a direct side because if companies have large centres of expertise and can do a project themselves, they sometimes come to us direct, so they don’t have to bring in an SI. We have to keep that mindset that not every situation needs a global SI.”
SNP has been working on its software, which Rosinski acknowledged had been very complex, to enable partners to use it effectively.
“When we started on our partner approach, this was initially difficult,” Rosinski acknowledged. “We have been trying to make our software easier to use, and have also enhanced the training around it We have six primary solutions that we sell into North America, and we are trying to make each easier to use, so that customers can decide whether they want to use an integrator, us or themselves. This situation is getting better. It’s what the market wants today.
SNP’s advantage of being able to design a channel from basically scratch in North America has allowed them to be manage their addition of partners in a way that prevents them from tripping over each other, or with SNP’s direct sales.
“We developed the channel strategically, so there’s no channel conflict,” said Kenneth Chang, SNP’s VP of Marketing. “We are happy if they have all the services. We share leads, and invest marketing dollars in joint lead generation with partners who put skin in the game and are at a certain level.”