Looking for evidence about how serious SAP is about the channel? Keep an eye on whether it succeeds in its efforts to rebuild the Business Objects software reseller program.
Business Objects, the Paris, France-based developer of business intelligence software, had a thriving partner channel when SAP acquired it in 2008. But SAP restricted partners to reselling Business Objects software to small and mid-size companies – originally those with sales under 300 million Euros, later raised to 500 million Euros – despite the fact that partners offered a wealth of business analytics expertise that was applicable to small, midsize and large customers.
The result: erosion of a once-vibrant channel and the defection of a significant number of Business Object partners. How many? SAP won’t disclose how many partners it had then or how many it has today.
But in an interview at last week’s SapphireNow conference in Orlando, one Business Objects partner spoke volumes when, in passing, he referred to the Business Objects partners still working with SAP as “those of us who are left.”
SAP executives today acknowledge that the channel sales restrictions were a blunder. “We understand we made a mistake,” said Eric Duffaut, president of global ecosystem and channels, in a press conference at SapphireNow. “We did something really wrong.”
Broadly speaking, SAP is working to transform itself into a more channel-focused company. Already the channel accounts for about 30 percent of the company’s sales – up from single digits just a few years ago – on the way to the goal of 40 percent by 2015. And solution providers, both long-time SAP partners and new recruits, say they are seeing the results.
One major step toward the 40-percent goal is leaving to the channel all SME (small and mid-size enterprise) accounts. Another is allowing partners to work with SAP’s direct sales organization to sell to enterprise-class customers under the new Extended Enterprise Sales program. At SapphireNow Mark Milford, the national vice president of the North America Partner Ecosystem Group, said that last item is his top priority during the next six months.
SAP’s goal in North America is to increase the number of partners by 40 percent this year, said North America COO John Graham in an interview at SapphireNow. (He declined to disclose actual numbers.)
But re-establishing the Business Objects channel may be SAP’s biggest challenge. Rebuilding something you already owned and broke is often harder than building something new from scratch.
SAP already has taken some serious steps here, not least of which is lifting the sales restrictions on Business Objects resellers. Milford notes that is already leading to bigger average selling prices for reseller deals and more services revenue for partners.
The vendor now has partner account managers dedicated to the business intelligence channel and has two full-time recruiters enlisting new solution providers. SAP execs say they’ve already successfully brought back some disaffected Business Objects partners, as well as new partners who sell competing BI products such as Oracle’s Hyperion software.
Is it enough? Time will tell. But think of Business Objects as SAP’s channel litmus test. If the company succeeds in rebuilding that program, its seriousness as a channel player will be confirmed.