SAP spawns two new companies

SAP spawns two new companies

As part of applications vendor SAP's renewed push into the lower reaches of the marketplace, it has spawned two new companies to resell, implement and support R/3 in New South Wales and Victoria. The NSW office is operating now; the Victorian location opens in June.

The new companies will target organisations with revenues below $150 million per annum, leaving SAP to focus on the top end of the market. While SAP drove the creation of its new partners, sources say it has invested no money in them and owns no equity in either company.

In both cases the companies will be mandated to sell the full range of R/3 products including Unix, NT and AS/400 solutions, as well as selling third party solutions which plug into R/3. However, they will only sell SAP approved products and SAP will set the prices. While the new ventures can offer lower prices they will do so at the expense of their own commission from SAP, according to SAP managing director Les Hayman.

Former SAP professional services director Thomas Besthorn, a 17-year veteran of the company, has partnered with Ronald Fiel of Setac, an R/3 consultancy, to form Sydney-based ESP which has been operational since May 1. Setac has about 20 consultants and is believed to number Toyota, Marbig Rexel and Kone among its R/3 clients.

Former SAP sales director Peter Boyd will set up the Victorian outfit and his company, which is yet to be named, is expected to start trading on June 1. It will partner with consulting company SCS. Neither company has exclusive rights to R/3 in its area, although Hayman says he has guaranteed both companies they will have free reign until the end of the year.

The operations of the new R/3 resellers will remain tightly integrated with SAP. For instance, they will have to register their sales leads with SAP and these leads will be fed into the same prospect management systems that SAP uses. Indeed, Hayman says he sees the resellers as simply an extension of the current sales force.

On the support side, both companies will be required to offer help desk facilities for their clients and provide front line support. If issues arise that they cannot deal with, queries will automatically be referred to SAP. "This process will be will be invisible to the end user," Hayman said.

SAP's push into the lower end of the market suffered a notable false start two years ago when the company abandoned R/3 Lite, a stripped-back version of its popular enterprise-wide applications platform. Hayman says R/3 was always intended as a mid-range solution but that marketplace demand pushed it into the high end. Of course, this explanation may lead mid-range users to ponder why R/3 Lite was ever necessary if the original product was conceived with them in mind.

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