Canadian SAP PartnerEdge members can look forward to continued commitment from the enterprise software firm to sell a significant portion of its business via the channel, including new offerings in the form of cloud-based applications running on HANA such as SuccessFactors.
SAP has opened up its channel partner program in recent years, lifting limits on who channel partners can sell SAP licences too and only maintaining a short list of customers reserved for direct sales. SAP continues to aim to sell 40 per cent of its business through the channel in Canada and has nearly hit that target. It may be that allowing partners to resell new cloud-based services could help nudge it towards that goal. SAP discussed some of its designs on the channel during the first day of its annual Sapphire Now conference in Orlando on Tuesday.
One new cloud-bases service that channel partners will gain access to in Canada this year is SuccessFactors, a human capital management (HCM) solution that SAP acquired for $3.4 billion in December. Normally a direct seller, that new product will be opened up to SAP’s PartnerEdge program in Canada this year, says Shawn Price, president of SuccessFactors, though he cautioned the program is “in its infancy” and without a guaranteed timeline.
“You’ll probably see mid-sized businesses [Price qualifies this segment as 5,000 seats or less] opened to the channel whereas larger enterprises will want to stay more direct,” he says. “You’ll see by the end of the year the evolution of a robust and growing channel that’s having demonstrable success.”
Related Stories
That sounds like a gem of an opportunity to Michael Pearson, the president of Contax Inc. This Toronto-based SAP partner is hearing a lot of demand for HCM solutions from its small to mid-size customers. So it will make sense to offer SuccessFactors when its available, especially as a cloud-service. Pearson says HCM is like a commodity for many businesses that aren’t dealing with employees that are too specialized and it makes sense to implement a cloud solution for that scenario.
Though he’s offering SAP core products for the human resources vertical already, those on-premises software products just aren’t as shiny as these new cloud offerings.
“It’s not the stodgy old on-premises software,” Pearson says. “It’s a new generation of software… software as a service is a new way of designing and interacting with software.”
The 5,000 seat limit means the Canadian market is quite open, he adds. Cloud sales would see a different type of margins than typical software sales because the partner would get a percentage of the subscription fees instead of one bulk payment. On the plus side, there’s no implementation requirements for partners, but some training might be required.
SuccessFactors is currently working on coding extensions to allow it to integrate with SAP’s HANA platform. The in-memory database is touted for its speed in dealing with “big data” – meaning voluminous amounts of both structured and unstructured data.
SAP revealed it was launching an infrastructure as a service product with HANA in the cloud earlier in May. But today at Sapphire, it revealed that platform will serve as its platform for all cloud services. Any SAP app that runs in the cloud will run on HANA, which is currently being hosted only in SAP data centres as a private cloud model.
“HANA not only represents intellectual renewal of SAP,” said Bill McDermott, co-CEO of SAP in his opening keynote at Sapphire. “It represents the platform on which SAP will do everything going forward.”
The private cloud step will be part of a transition to offering services through the public cloud and the servers of partners, according to Price. HANA in the cloud will allow customers who want to migrate from on-premises to the cloud to do so fairly quickly, he says. Though some will want to maintain an on-premises deployment or hybrid model for many situations.
“Our customers have made significant investments over decades in these systems, he says. “It’s not a rip and replace, it’s a evolutionary vs. a revolutionary approach.”
Contax will look to offer HANA in the cloud once its available as well, Pearson says. He sees an opportunity to bring the technology to SMBs who haven’t been able to access the enterprise platform so far. Any operation that deals with a lot of data could make use of the in-memory database.
Pearson says SAP doesn’t approve a lot of partners for its PartnerEdge program – “It’s not about volume. It’s about quality.” But they do invest in the partners they choose and support them well.
If HANA in the cloud and SuccessFactors are as successful as SAP says they could be, Contax could make non-SAP channel players green with envy.
