SAP to thin Business One channel

SAP to thin Business One channel

SAP is to part company with its worst performing Business One resellers following a channel review. SMB director, Tim Cavill, said he expected to lose about 20 per cent of its current line-up, which would open up opportunities for a handful of new dealers.

If last year had been about evangelising the product and recruiting partners, Cavill said 2005 had seen SAP making partners self-sufficient.

The Business One channel currently has about 300 customers generating annual revenues of about $10 million. Cavill said he would like to almost double that customer base in the next 12 months and reach 1000 by the end of 2007.

Despite looking to aggressively grow the user base, Cavill said this would not mean recruiting a host of new resellers.

"The model is driven by quality not quantity," he said. "We don't believe the market can sustain 100 resellers. We need partners that are going to make SAP the dominant part of their business so they can reach critical mass, invest and grow."

Cavill said some partners had built substantial businesses around SAP while others had not.

"It's no surprise really," he said. "Our job now is to weed out the non-performers and do more business with those that have the capacity to do so.

"We will be reviewing business plans with partners and, where there is a significant revenue gap, we will ask what we can do to fix it. If there's nothing we can do, we will go our separate ways."

When recruiting new Business One partners to plug the gaps, Cavill said he would be particularly interested in resellers with geographical coverage in country Victoria, Darwin and far north or central Queensland. He would also look to strengthen its hand in regional centres like Newcastle and Wollongong.

To date, SAP has drawn a line in the sand that saw customers with revenues exceeding $200 million having a direct relationship with the vendor. But Cavill said it had now decided to waive this rule in particular instances where partners were adding a lot of vertical specialisation.

"We will take the best route to market for a particular sector or customer depending on the IP within our channel," he said. "For example, we have developed a relationship with Supply Chain Software during the past couple of years, which is focused on the retail apparel space.

"It has productised IP for that industry so why wouldn't we let it lead our engagements above the theoretical line in that vertical market?"

From a competitive perspective, Cavill said SAP would be concentrating on trying to convert users from the myriad of boutique offerings in the market.

"The dominant provider in business management applications isn't SAP, Oracle or Microsoft," he said. "There are hundreds of smaller providers out there that are all struggling to achieve critical mass. Finding those deployments and replacing them is a real opportunity for us."

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