SAP Looks to Rally the Channel

As SAP gets ready to formally unfurl a new SAP Sales OnDemand offering this month, the company has Salesforce.com squarely in its sights. But in order to compete effectively against an entrenched competitor, SAP will need all the help it can get from the channel.

Kevin Gilroy, SAP senior vice president for ecosystem and channel, clearly knows this. In an exclusive podcast interview that took place during the recent SAP Sapphire Now 2011 conference, Gilroy says that SAP has created a hard deck that solution providers as a rule can count on as being the sole province of the channel. The challenge for SAP, however, is going to be giving channel partners enough marketing air cover to take on Salesforce.com.

There’s not a lot of love lost between Salesforce.com and the channel. Most of Salesforce.com sales come via a direct sales model even within the small-to-medium business (SMB) sector. SAP is hoping to leverage that lingering resentment in the channel, along with some very healthy margins, to get solution providers to proactively sell SAP Sales OnDemand.

To accomplish that goal, SAP is pushing to two core themes. The first is that the cost of integrating its sales force automation software with the rest of the SAP suite of applications is a lot less. The second is a user interface that borrows heavily from Facebook to create a collaboration environment that gives sales people more control over what information they choose to share. In effect, this eliminates the need for sales people to have their own productivity applications to manage their personal information alongside a customer relationship management (CRM) system that serves as a system of record. In SAP parlance, this effort is part of a larger strategy in which the company is trying to bridge systems of engagement with systems of record.

The degree to which that effort will succeed remains to be seen. But one thing that is for certain is that as SAP becomes a more channel-friendly company, solution providers have a new opportunity to compete in a sector that for a variety of reasons has been less than kind to the channel.