SAP eyes big time distribution deals

Signaling the next stage in SAP’s (NYSE: SAP) evolution as a channel player, the business software vendor has confirmed it is in discussions with Synnex and Tech Data as possible distribution partners for SAP’s SMB-focused Business One offering.

Currently, Business One is distributed to over 200 SAP partners in North America by SAP directly. However, with the continued growth of SAP’s mid-market offering and the growth of its channel program, the ERP vendor has decided to explore adding one or more distribution partners.

“This is the natural progression of the channel for SAP,” said Conrad Mandala, vice-president, SME channels, SAP Canada and SAP Business One, SAP North America. “It (once) made sense for us to distribute directly to our VARs, but as we’ve grown in field and scope, it makes sense to go to a distribution company to help with the logistics, recruiting, information, training, and all the great things they do.

It’s now become cost-effective for us.”

Mandala confirms he has had several meetings with a number of distributors regarding a North American distribution agreement for Business One, with more meetings scheduled over the next 90 days.

It’s his hope to have a program in place by mid-2009.

“Our expectation is that by mid-year we’ll be able to have a pretty significant announcement about what that’s going to look like,” said Mandala. “I’m optimistic that we’ll have something live and ready to go by mid-next year.”

Discussions are ongoing, but Mandala confirms he has had meetings with Synnex and Tech Data. Both distributors, he says, have done an “equally outstanding job” coming back to SAP with ideas and proposals.

“We’re investigating all the best opportunities for us to continue to grow our business,” said Mandala.While much is still on the table and undecided, Mandala appears lukewarm to the idea of going exclusive with one distributor at this juncture.

“I would say that exclusivity is a dangerous term in this marketplace,” said Manada. “We continue to leave all of our options open to how we’re going to make that final decision, but the decision will be made in the best interests of our partners, who are making significant investments, and SAP’ ability to grow our business.”

In another significant channel development, SAP has inked Deloitte Canada as a new member of its PartnerEdge partner program to bring its Business All-in-One offering, targeted to the midsize enterprise market, to customers across Canada.

Mandala says adding Deloitte Canada as a partner broadens SAP Canada’s coverage significantly from coast to coast, and fits in well with the vendor’s partner strategy of favouring quality over quantity when growing its channel. As this has been the partner strategy, Mandala says he expects channel conflict to be minimal. He adds Deloitte has joined the partner program on a level playing field like any other partner, with no special terms or conditions.

“This is probably the most exciting thing we’ve done in the channel over the last five years,” said Mandala. “We’re really excited about it.”

Deloitte has already been working with SAP Canada in the large enterprise space and Bruce Parker, a partner with Deloitte Canada, says by becoming a Business All-in-One partner, Deloitte will be able to offer a fuller offering to its clients. Today, Parker says Deloitte has over 200 staff dedicated to SAP, focused mainly in Calgary, Edmonton, Winnipeg, Toronto, Montreal, and Halifax.

“This relationship rounds-out our premiere global relationship with SAP,” said Parker. “We’ve been a partner of SAP’s for a long time and this now affords us the opportunity to be there from the beginning of the sales lifecycle with SAP, and it brings out the power of our firm in the (mid-sized enterprise market).

Especially in a country like Canada, where we have very broad and deep coverage.”

Deloitte had invested in industry specific solutions, including software implementation, documentation and training, that Parker says allow clients to hit the ground running. Their key verticals are food and beverage, aerospace and defence, utilities, real estate and life sciences.

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Jim Love, Chief Content Officer, IT World Canada

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Jeff Jedras
Jeff Jedras
A veteran technology and business journalist, Jeff Jedras began his career in technology journalism in the late 1990s, covering the booming (and later busting) Ottawa technology sector for Silicon Valley North and the Ottawa Business Journal, as well as everything from municipal politics to real estate. He later covered the technology scene in Vancouver before joining IT World Canada in Toronto in 2005, covering enterprise IT for ComputerWorld Canada. He would go on to cover the channel as an assistant editor with CDN. His writing has appeared in the Vancouver Sun, the Ottawa Citizen and a wide range of industry trade publications.

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