Orlando – SAP (NASDAQ: SAP) Canada has engaged Foster MacCallum International Ltd. to lead a new drive to recruit partners in Canada for SAP’s solution for mid-market, Business All-in-One, with the goal of growing its partner base for the solution from nine partners to 15 nationally.
The vendor will rely on Foster MacCallum to identify, profile and qualify potential partners on behalf of SAP Canada, as well as provide partners with workshops, meeting appointment services and other resources.
Building capacity will be key to achieving SAP’s growth plans in Canada and capitalizing on the SME opportunity says Conrad Mandala, vice-president of SME channels with SAP Canada. And the growth plans are aggressive. As part of SAP’s plan to grow the percentage of North American SME business done through the channel from 10 per cent to 45 per cent, SAP Canada is seeking to grow its figure from 30 per cent to 45 per cent.
However, Mandala emphasizes that doesn’t mean SAP Canada will begin to go for quantity over quality on the partner front.
“Everything we’re doing in the partner channel is to go after quality partners that fit the SAP profile; it’s quality first,” said Mandala. “This is not a quantity play. We’re focused on the quality of the solutions and services delivered to our partners.”
The vendor is looking for partners of all sizes, from large consulting firms with national presence to smaller VARs with geographic and vertical expertise, but Mandala says Western Canada and the Maritimes in particular are areas where SAP sees partner opportunity. As SAP builds channel capacity in Canada he says they’ll also be looking to leverage the partner base of Business Objects, the BI vendor acquired early this year by the company.
Not all of the additional capacity will come from the formal PartnerEdge channel program. SAP Canada used the annual Sapphire user conference in Orlando to announce the vendor’s referral program, launched earlier in the U.S., into Canada. The program allows companies that aren’t currently SAP partners, be they ISVs, VARs or even accounting firms and business consultants, to refer business to SAP and its channel community, and generally receive five per cent of the deal’s net software license value as a reward.
The goal is to expand SAP’s ecosystem in Canada, says Mandala. They’ll be looking for companies with specific areas of expertise that play on the edges of the ERP space. And while it’s not an intent of the program, he adds the referral program may also serve as an on-ramp for future SAP partners.
“Theoretically someone can’t be a VAR to start off with, but as they build programs and engagements with SAP they might become more comfortable with making that engagement,” said Mandala.
While the referral program has potential, it’s unlikely to drive a lot of business for SAP in Canada says Paul Edwards, director, SMB and channel strategies at IDC Canada, as the ability to refer quality opportunities requires intimate and high-level relationships with the end-customer.
An infrastructure-focused niche VAR, for example, isn’t likely to have access to the people within a client that would pull the trigger on an ERP implementation, he says.
“I’m not saying they’re not gong to get any traction out of it, but I don’t think it’s going to make up a big part of their business in Canada,” said Edwards. “It does create at least a funnel they can use to move opportunities down to their partners. It’s important to have another component to drive business for partners.”
The moves are all designed to build capacity in the channel, says Mandala, which has become key since SAP Canada widened its channel opportunity by raising the ceiling on deals available to partners from Canada from $250 million to $1 billion. There are still some very large named accounts reserved for the direct channel, but otherwise, Mandala says that broad area is open to partners, and they’ve responded to the wider opportunity.
“Partners have now started to invest in growing their SAP business on that growth path,” said Mandala. “We’ve got partners coming to us and saying they want to get aggressive; we’ve provided enough scope and scale for them to say this is worth investing in and going after.”
It’s a robust market opportunity for SAP in the SME says IDC’s Edwards, but building partner capacity will be a challenge, as will finding partners with the right skill sets to serve the market. The vendor is correct, he says, to take a slow and steady approach valuing quality over quantity.
“They’re somewhat limited in the partners out there that meet their requirements for quality,” said Edwards. “Some are trying to make the transition but it takes time, investment, help, and an ROI calculation on both sides to make it viable.”
Another inhibitor to those growth plans can be access to talent, and to address that challenge SAP Canada has enlisted a human resource services firm, Silver Creek Partners, to provide candidate search and qualification services for its channel partners. The service is available for a fixed fee, and partners can leverage their earned market development funds for the service.
In the partner support arena, Mandala says this year SAP Canada also hired a channel development director and two staffers, whose sole job is to work with channel partners to help them get their message to market.
“That’s a huge change for SAP,” said Mandala. “We’ve never had those positions before.”
One partner leveraging the new support from SAP Canada around marketing and staff recruitment is Coastal Range Systems, a Business One partner based in Burnaby, B.C. CEO Stephen Loyd says he has already utilized the service to successfully fill a pre-sales position for the 60-person solution provider, and is about to tap it again to fill a sales role.
“We were one of the initial participants in Canada, and we’ve found the system to be really advantageous to us,” said Loyd. “It was the first time we formalized a pre-sales role on our organization, and they were really able to help us find the right candidates, and define what the right candidate might look like.”
Coastal Range Systems also partners with other vendors such as Microsoft (NASDAQ: MSFT), IBM (NASDAQ: IBM) and Sonicwall (NASDAQ: SNWL), and Loyd says from a channel support perspective SAP Canada has been doing a great job.
“Our accessibility within the organization has been greater than we expected given that it’s such a large company, they’ve been gaining greater focus in the pre-sales organization and promoting sales support strongly,” said Loyd. “It’s the best channel relationship I’ve ever enjoyed in my career.”
