SAP Pays Partners, Goes with Gusto for Small and Medium-Sized Business Customers

Enterprise software vendors such as SAP and Oracle are hot on the trail of the SMB market, offering substantial referral fees to technology partners for delivering small and midsize customers to them.

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Out of sheer economic necessity (there's only so many Coca-Colas and Wal-Marts to sell to), enterprise vendors such as Oracle, SAP, IBM and Microsoft have, in the last year or so, set their sites on conquering the SMB business application market. To achieve that, the vendors have overhauled their application offerings and marketing messages.

"They all have the same goal: Make these applications easier to consume, less expensive, less complex, with more prebuilt tailoring for specific industries and processes," Wilson says. "They're just hungry for it."

Evidence of just how much the times have changed can be seen in SAP's Business One ERP product line, which targets companies with 10 to 100 employees. Or its Business ByDesign on-demand software offering, which turns the traditional software licensing, installation and maintenance model on its head. This, after all, is the same company that made its bones implementing large, complex and expensive software rollouts almost exclusively to the Fortune 1000.

When asked if SMB companies are surprised by SAP's newfound attentions, Hume confirms that they are. "Right or wrong, SAP has been for 35 years the leading industry supplier of ERP to large enterprises," Hume says. And now, she adds, SAP's goal is to "bust the myth that SAP is only for great, big companies."

SAP's Mission: 100,000 Customers

One of SAP's often-stated goals is that, by 2010, it wants to have 100,000 customer organizations running its software. In addition, SAP cofounder and legendary leader Hasso Plattner let it be known that he'd like to see SAP with 100 million users toiling away on SAP products.

As of 2008, SAP has a total of 46,100 customers worldwide. SAP's entry into the lush SMB market is obviously one way in which to achieve its goals. Hume notes that 74 percent of SAP's customers fall into the small and midsize category (under $1 billion in annual revenues).

To reach its lofty goals and penetrate the SMB market, SAP realized that it was going to have to expand existing partner relationships and create new ones that would eventually drive recommendations and business to SAP. And better market itself.

The SMB arena is a "very local market," Hume says. SMBs "tend to purchase from trusted advisers, people that they've been working with for years, who have helped them design and define their processes."

So the new partner program, enhanced with the referral fee, was aimed at raising SAP's profile among the previously ignored and untapped market. "It was important that we start to build more voice out there, with more people that can, if you will, not necessarily sell SAP products but smell for small and medium-sized opportunities," Hume says. Which is why the referral program is open to a wide range of people and businesses playing in the software industry.


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