SAP Shifts 5,000 Direct Accounts To Channel Partners

SAP is transferring more than 5,000 customer accounts to its channel partners and is reorienting its inside sales force to focus on working with partners instead of selling to enterprise customers.

The moves are the latest steps in SAP's ongoing expansion of its channel operations, and the company may exceed its goal of logging 40 percent of its sales through the channel by 2015, said Kevin Gilroy, Senior Vice President, Global Indirect Channels, SAP in an interview.

SAP identified 5,000 customers around the world, which until now the company serviced directly, that would be better served by solution provider partners, Gilroy said. "And we are moving them quickly to the channel."

Those accounts are being matched up with partners based on geographical location, product expertise and vertical industry experience, Gilroy said. He said he expects the transfers to be completed by midyear.

SAP categorizes customers as enterprise—which it sells to directly—and general business, the latter small and midsize customers SAP relies on partners to service. SAP has been moving up the threshold between the two, growing the number of customer prospects channel partners can sell to. That's also the main driver behind the shift of the 5,000 customer accounts to channel partners.

SAP, which once focused on selling direct to large companies and had a minimal presence in the channel, has been steadily ramping up its sales through the channel in recent years. Gilroy said channel sales accounted for 34 percent of sales last year and is growing at twice the rate of the software vendor's direct sales.

SAP's top executives have set a goal of moving 40 percent of the company's sales through the channel by 2015, but Gilroy said he thinks the company will exceed that. SAP has doubled its channel sales in the past two years "and we will double that again in the next two years," he said.

Prior to last year, SAP's inside sales organization focused on driving transactional sales to enterprises. But the company has reoriented the organization to work 100 percent on assisting channel partners. That includes generating sales leads for the channel and helping partners cross-sell and upsell to existing customers, said Ann-Mari Doody, Senior Vice President, Global Inside Sales, in an interview.

"The majority of the focus will be on net-new business," she said.

Inside sales will particularly focus on generating channel sales for SAP's channel-friendly software products, such as its Business Objects business analytics products and Business All-in-One application suite, according to Doody. The inside sales organization also will work with partners to develop online solution demonstrations and workshops.

"Inside global sales is now a channel support machine," Gilroy said.

Doody declined to disclose the size of SAP's inside sales organization, other than to say the number of employees is in "the hundreds." The company is adding to those ranks, including creating a number of inside partner account managers to work with channel partners and SAP's field partner account managers.

SAP also plans to recruit 500 additional channel partners globally this year, Gilroy said. The company currently has more than 12,300 partners, including systems integrators and resellers, the latter accounting for about 3,000 of the total.

Gilroy said SAP's recent channel gains are "proof points" that the company's channel initiatives are paying off. "We are really trying to drive the channel DNA into the company."