SAP touts SME success

SAP Australia's push into the SMB market appears to have paid off with the enterprise application giant signing 28 channel partners and around 100 new local customers for its Business One software suite since launch last November.

But Tim Cavill, SMB director at SAP Australia and New Zealand is not quite satisfied yet. His division -- which represents around 10 percent of SAP Australia's total sales revenue -- is shooting for another 300 new customers next year, with all contracts delivered through its fresh base of channel partners.

The company had selected channel partners with a pedigree of mid-range application sales and a legacy customer base they had been supporting, he said. "We've engaged only with businesses that had that experience and wanted to build a business around the Business One product."

"We didn't want to run an MBS [Microsoft Business Solutions] model -- we wanted a small, strong, robust and profitable group of business partners," he said.

The 100 new customers ranged from companies with two to three seats up to around 70 seats and included distribution and trading companies, Cavill said.

Cavill said the company wanted to gain more mid-market share in a 'fragmented' market sector which is made up of many local players and global vendors who don't have "critical mass" here.
Cavill said Business One is designed for the channel and lends itself to this model.

In July this year, Adrian Di Marco, MD at Australian financial software developer Technology One claimed the reseller model in the mid-market is flawed. At the time, he said the mid-market reseller model "doesn't lead to happy customers" because these customers were price conscious and wouldn't pay a premium.

Still, Cavill said at this end of the market, "the user wants to work with a channel partner."

SAP Australia, which will report its 2004 calendar year results next month, expected sales to increase this year by just under 30 percent, Cavill said. "We're winning more business in the tier 1 space than we ever have," he said, adding that a lot of customers had only bought certain "modules" within the whole SAP portfolio of products.

The company was hoping to derive 15 percent of its global sales revenue from the SMB market next calendar year.