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SAP Referral Sets a Larger Table
By John Hazard

SAP will launch a formal referral program in March to expand its market reach beyond its traditional partner set, company officials said.

The referral program, which will provide referral partners 10 percent of the initial license sale of any product the vendor sells a new customer within six months of an introduction, is a means to engage non-traditional SAP partners—those unwilling or unable to make a commitment to SAP’s PartnerEdge program–and others, including business consultants and Certified Public Accountants, officials said.

The program will also benefit SAP partners unable to sell products such as mySAP and SAP CRM on-Demand, which must be sold direct.

The referral program recognizes that SAP asks a lot of its partners, said Michael Sotnick, senior vice president for small and midsize enterprises, and makes room for those unwilling or unable to make the investment in being a full reseller.

SAP holds a tight rein on its Business One and All-in-One partners, operating in the small and midsize business space, where partners are the primary route to market.

The partner program, PartnerEdge, requires VARs to have dedicated resources and staff and limits the number of resellers to mitigate channel conflict.

The referral program sets a place at the table for those outside the traditional partner mold, Sotnick said.

“The conversations we had with resellers told us there are companies out there representing a competitive solution, or complementary solution, and the starting point [to become an SAP reseller] was expensive,” Sotnick said. “Now we’re able to walk them through referral program with very little effort.”

“If you are a Hewlett-Packard and IBM consulting company specializing in clinical trial consulting for a startup biotech interested in mySAP, you can engage with us in referral partner arrangement,” he said.

“If you identify a net new opportunity, you are able to secure 10 percent of the net license fee paid by the customer and be referral partner of record for all license transaction for the next six months. If they come back in a week and say “We need another 20 licenses,” that is applied to your referral.”

The program will expand SAP’s partner reach beyond its cadre of Business One and All-in-One partners, Sotnick said.

It also provides an introductory period for VARs and ISVs interested in a relationship and engages partners who would never otherwise deal with SAP.

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Six partners are on track to become referral partners when the vendor rolls out the program in March and another 15 interested. By the end of the year, the roster could swell to 100 members.

SAP met some criticism from the public two weeks ago when it was announced that its CRM on-demand would be sold directly to customers, but the application, Sotnick said is aimed at the enterprise—businesses with $1.5 billion and more in annual revenue and not the SME (small and medium enterprise) space, where SAP’s partners are engaged.

“We’re not targeting the SME space right now,” he said of the CRM product. “It is SAP’s first foray into Software as a Service. It’s a great solution for the upper and middle enterprise, and if an SME has with genuine interest, the referral will be open to anyone who brings us the business.”

The company’s goal is to make the product successful in the enterprise space, and then it will be considered for deployment downstream, he added.



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