It used to be that companies wanted to reach the big guys, Fortune 1000 companies, to secure huge deals for their products and services. Today, that philosophy has changed. Sure, people want to land the white whale that will inject large amounts of capital into their business. But they also want to have a stable client base that provides regular, predictable sales and won’t kill the business if one or two suddenly fail or stop doing business with your company.
Enterprise software and hardware giant SAP is no different. For SAP, making the move into the small and midsized enterprise space, otherwise known as SME, had more to do with spurring SAP’s growth than simply diversification — though that didn’t hurt.
Smart Business sat down with Kevin Gilroy, senior vice president, SAP Channels and Ecosystems, SAP Americas, to talk about SAP’s transformation and newly honed focus on the SME marketplace.
Kevin, how has SAP been targeting the SME space?
About 78 percent of our customers are in SME, so we’re a big player there. Our brand is certainly stronger in the enterprise and large enterprise space than it is in the SME, but we have a deep penetration in that space, and it’s been an important component of our strategy. Another is a fast-rocketing business analytics practice, along with an on-demand and mobility initiative.
Today, there’s a fast-growing channel ecosystem that is ramping up the channel partners that were in the program, and now we have 3,000 around the world, including 700 in North America, that are clamoring to get into the program. And, we’re going through a transformation to make this a step-function improvement. The transformation is around six pillars.
What are those pillars?
Pillar No. 1 is to amplify the brand in SME. The SAP brand is the 25th most powerful brand in the world in enterprise, but you get down into SME and the brand isn’t quite as well known. So we have a whole team working on building that brand.
The second pillar is around a complete re-engineering of the marketing organization within SME. We know that SME is not a one-on-one enterprise selling motion; it’s a one-to-many selling motion. That’s how you scale. It’s not about knocking on each door. Instead, you have to get the marketing machinery out there, so we renamed that team to be ‘revenue marketing,’ not to be confused with ‘brand marketing.’
Revenue marketing is building pipe and demand for our channel to grow the business. Now it’s analytically driven, has the art and science of marketing combined, predictable marketing and predictable analytics in place. I can go to the company executives and say, ‘If you pour this amount of money in the marketing machinery, here’s what comes out of the other side.’
And we will predict it well.
That’s a re-engineering for SME because we had a market into the Russell 2000, but now we’ve re-engineered it to go after everyone else and spur fast growth.
The third pillar is our ecosystem build-out. Our goal is to add 1,000 feet on the street in two years, within our channel base and new channel partners. Now, in addition to those 1,000 salespeople, there’s demo, pre-sales consulting, installation and maintenance people behind it. So it’s probably more like 5,000 people.
How are you measuring that timeline to achieve the goal?
I’m pretty metric-driven and we are already ahead of plan. We’ve added more than 150 feet on the street in the first 120 days (through the end of November 2010), and there’s a pipeline of people knocking on our door to join our program.
One thing of note is that 100 percent of new business in SME will be through the channel partners. We will not take a direct order in new business. So we’re building out that ecosystem quickly.
