SAP Grants Channel Partners Sales Exclusivity For 'General Business' Customers

"A billion [dollars] and below is the purview of the channel. We've opened up this space to be pure channel," said Kevin Gilroy, SAP senior vice president of global indirect channels, in a call with analysts and press.

SAP has been aggressively moving into the channel in recent years. The company recorded 86 percent growth in its channel sales in the U.S. last year, Gilroy said. That pushed U.S. channel sales to 139 percent of what the company had planned for 2012.

[Related: SAP Shifts 5,000 Direct Accounts To Channel Partners ]

SAP classifies customers with annual revenue of $1 billion and below as "general business," while larger customers are considered "enterprise." Gilroy said channel partners now have exclusive rights to sell to general business customers.

SAP now puts the worldwide addressable market for the company's channel partners at $220 billion, double an earlier estimate. That reflects the decision to reserve general business customers for channel partners, combined with other market changes and additions to SAP's product line.

SAP's goal is to have 40 percent of its sales moving through channel partners by 2015. One-third of all SAP sales last year were through the channel, and Gilroy said channel sales growth would outpace SAP's overall growth this year.

Worldwide SAP has 250,000 customers and 80 percent of those are small and mid-size enterprises (SMEs). While the majority of those customers are currently serviced through the channel, Gilroy said the goal is to have as close as possible to 100 percent of those customers serviced by the channel.

The vendor has set itself a goal of having 1 billion users worldwide by 2015. "Channel is the way we're going to get to a billion people," Gilroy said.

This year the focus of SAP's North America channel operations will be on building sales capacity for key partners, including leveraging solution providers with vertical industry expertise and improving partners' "engagement experience" working with SAP, said Troy Richardson, senior vice president and general manager of SAP's North American ecosystem and channels group.

Richardson, speaking on the same call with Gilroy, also said the company is ramping up its work with OEMs, key distributors and systems integrators.

Richardson has been in the North American channel chief post since November. Before joining SAP he was vice president of Americas manufacturing industries at Hewlett-Packard. Prior to that he held executive posts at Xiocom Wireless, Novell, NCR and IBM.

He reports to John Graham, SAP's North America chief operating officer, who held the North America channel chief post for part of last year before moving into his current role.

On the cloud-computing front, Gilroy said SAP is seeing its channel partners engage in more hybrid cloud projects. Some customers, for example, are implementing SAP Business One software on premise, then supplementing that with the vendor's cloud-based applications, including CRM, travel and expense management applications.

PUBLISHED APRIL 4, 2013