SAP opens up to smaller resellers

Enterprise software giant SAP has announced it will pursue a strategy of appointing "master value added resellers" to manage its smaller Australian resellers, after successful trials of the model overseas.

The vendor today officially announced that gold reseller partner Extend Technologies has been appointed the first such 'Master VAR' in Australia.

The Master VAR is expected to provide induction, sales and pre-sales training, technical training and consulting certification to a new breed of SAP channel partners - be they hardware vendors, business consulting firms, integrators, resellers and independent software vendors.

Originally launched and trialled in Europe, the Asia Pacific and Japan, the program allows for a wider variety of channel partner organisations to use the SAP brand, whilst relieving SAP of the burden of directly managing their day-to-day needs.

This new breed of SAP partner - to be known as an "Extended Business Partner" - will not need to go through the same hoops as an SAP PartnerEdge accredited partner, but will have to trade off that lower investmemt by sharing margins with Extend Technologies.

Cian McLoughlin, senior partner sales manager at SAP Australia said an Extended  Business Partner won't require as much investment to engage with SAP customers because they can "leverage the consulting, the pre-sales, the sales, the helpdesk of Extend."

PartnerEdge?

McLoughlin said the new program aims to complement and not replace SAP's existing PartnerEdge program. Resellers that have invested in this higher level of accreditation should not be alarmed, he said.

"From a margin perspective, you will get a higher margin at a PartnerEdge partner," he said.

PartnerEdge accredited resellers "have put the investment in and want to get a premium for their services and the highest possible margin," he said.

McLoughlin also stressed that SAP was not seeing the change as a "resource saving exercise", but rather an attempt to expand its channel.

"Ultimately this is about extending the partner program - Extend will be recruiting partner managers over time," he said.

Andrew Powell, general manager of commercial business at Extend Technologies said the program helps SAP widen its channel base.

"There are customers that want to deal with people they already know and trust, in their own geography or city - or with organisations that have been providing them services for a long period of time," he said. "But those relationships are sometimes lacking in content - the customer has a really strong relationship with agood service provider, and all the relationship needs to go to the next level is more solutions available."

Extend was capable in the areas of ERP, business intelligence, HR and Microsoft/SAP interoperability, he said.

Further, Extend has the required scale (some 100 full-time consultants) to offer skills across all elements of SAP, he said.

"One of the rules of thumb is that when we've gone and built up a new practice in a new city, you need 15 to 20 consultants to have critical mass. You also need a lot of resources to run an effective SAP helpdesk."

Powell said Extend would "take pieces of SAP and develop them into products easily understood, enabling other [partners] to promote those services in a reasonably simple way."

He said the strategy would make it easier for SAP to win partners that had previously chosen its competitor's solutions.

"It would suit someone who has been selling another ERP that is getting legacy in nature and is interested into get into SAP, without having to make full investment in sales team, support team or marketing infrastructure," he said.

There is no set ground rules for the sharing of margins between Extend and extended business partners, Powell said.

"We agree with [extended business partners] individually, based on the nature of engagement.

Will more 'Master VARs' be appointed? Read on to page 2.

More 'Master VARs' to come?

McLoughlin said SAP looked at "a variety of criteria" including Extend's historic performance as an SAP partner, their existing infrastructure and growth potential, before choosing the company as the first Master VAR off the rank in Australia.

"Extend has the added advantage of being partially acquired by NTT Data," he said - referring to the work fellow NTT-owned iTelligence has done in Europe. "Extend can leverage the skill sets and packages developed there."

McLoughlin said that for now, SAP's intention is to work exclusively with Extend to "bed down the Master VAR program."

But that does not preclude SAP from appointing more Master VARs in the future.

"Our intention would be to review the program over time - we'd keep our options open there," McLoughlin said. "If we did add another Master VAR, we'd look at the Business Objects (BI) side of the business first."

McLaughlin said the Master VAR program might be seen as a reward for those partners that excel after making an investment in SAP's PartnerEdge program.