How SAP Australia learned to love the channel

SAP Australia has broken through the $600 million mark – with its drive for more indirect sales a big part of the growth.

The vendor posted revenues of $626.8 million for the 12 months to 31 December, an 8.5 percent rise year-on-year.

The sales growth echoed the upswing across the vendor's worldwide results, where total revenue rose 14 percent to hit $16.2 billion.

SAP's global chairman of the board, Hasso Plattner, said the results were SAP's best ever; sentiments echoed by SAP Australia chief operating officer Greg Miller.

Miller pointed to cloud and mobility as two segments growing faster than the company average, while he stressed that SAP's push to expand its indirect sales was gaining momentum.

SAP has a global target to reach 40 percent indirect sales by 2015. That figure stood at 34 percent for its 2012 financial year.

The local business has been upsizing its channel division to hit the ambitious target. Last week, CRN spoke with recent SAP Australia recruits Beth Ryan, general manager, Ecosystem and Channels, and Rhody Burton, sales director, Channels.

Ryan joined SAP Australia in April following previous channel roles as alliances director at CA Technologies and business partner manager for IBM Australia.

Burton, meanwhile, joined SAP Australia in July 2013 after more than seven years at VMware, most recently as manager, Cloud & Channels.

Ryan told CRN that SAP Australia's breakdown of indirect sales was in line with the global target and that growth was accelerating.

According to Burton, SAP "is an organisation that is turning into a channel business".

"And the channel wants to get involved," added Ryan.

Cost of channel growth

According to its financial report, SAP Australia saw a marked decline in net profit after tax, which fell 68.6 percent from $47.8 million in 2011 to $15 million for the 12 months to 31 December 2012.

The company wouldn't go into detail on its local financials, but Miller said that the indirect sales strategy was partly to blame for the fall in profits, due to the high cost of building up its channel strategy, including recruitment.

"We needed to increase the headcount and make the investment last year to fuel that growth in the top line," he said.

Beyond the channel strategy, SAP also saw strong returns from its cloud push.

"There is a much stronger SAP as-a-service cloud offering in the market both from a public cloud consumption model but also what we have taken to market this year, which has been a big shift to a managed cloud, as-a-service offering."

Miller was confident that the local business would hit the global 40 percent target as planned.

"Are we tracking in the right direction for that objective? Absolutely. I'm happy with where we are and where we are tracking for the year."

SAP now has 860 staff in Australia and New Zealand.