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The OEM Primer

by Carolee Gearhart and Fergus O'Reilly | SAPinsider

October 1, 2011

SAP is on a mission to bring its core technology platforms to an even broader set of end users and to see these platforms used to provide new and exciting innovations. One of the ways SAP is doing this is by sharing their technology platforms with other solution developers through original equipment manufacturer (OEM) partnerships. This primer introduces you to the OEM concept, digs into some examples of how companies are benefiting from the OEM program today, and provides information to help other companies decide if they too are candidates for the OEM program.
 

The pace of business is faster today than it has ever been — and the demands for performance and productivity improvements at most companies have never been higher. To help business users meet these demands, the IT market is responding with an unprecedented wave of innovation, bringing end users new technology solutions and flexible delivery models.

SAP’s innovations in areas such as cloud computing, mobile applications, in-memory computing, and real-time analytics are helping our customers meet their business goals. But we want to bring our core technology platforms to an even broader set of end users and see these platforms used in ways we never imagined, addressing markets that we haven’t entered. One of the ways SAP is doing this is by sharing our technology platforms with other solution developers through OEM partnerships.

SAP as a Platform Provider

SAP’s OEM partner program offers SAP technology platforms to a range of partners, allowing them to embed SAP technology into their products for end-user benefit. Through the program, a dedicated team of SAP integration experts work closely with partners — from onboarding to enablement — to ensure they have the tools and products they need to embed or integrate our technology with their solution or service offering to meet their customers’ needs most efficiently. In doing so, they also expand the reach of SAP’s platforms into new and different markets. SAP’s OEM program focuses on sharing our core platforms, including SAP HANA, Sybase, SAP BusinessObjects, and the SAP Business Suite.

We’re very excited about the ways customers can innovate in their own markets using our software. This is the exciting part of working in the OEM space — the opportunity to be surprised, enchanted, and intrigued by new points of view on SAP software every day.

SAP HANA

From its inception, SAP HANA has been a product of — and a candidate for — OEM partnerships. As a combination hardware and software appliance, SAP HANA’s existence is only possible through cooperation with partners like Dell, Intel, HP, IBM, Cisco, and Fujitsu. At the same time, SAP HANA is also a perfect solution to be leveraged by other technology developers through an OEM partnership. For example, industries like medical, pharmaceutical, and financial services are consuming vast quantities of data and could gain market differentiation and increased returns from faster data analysis. Companies developing solutions in those markets can facilitate this speedy analysis by incorporating SAP HANA into their offerings for end-user benefit.

Sybase

The Sybase platform also opens up many opportunities for OEM partnerships in the mobility space. Companies that are developing mobile solutions can leverage the functionality of Sybase Afaria and the Sybase Unwired Platform to address security concerns and underlying infrastructure requirements. SQL Anywhere provides world-class database and data synchronization functionality for remote servers and mobile solutions, allowing companies around the globe to extend their expertise to new remote and mobile users. With so many technology developers focused on bringing mobile solutions to market, this is a rich area for OEM partnerships.

SAP BusinessObjects

Today, SAP BusinessObjects solutions are the most active in terms of OEM partnerships, driven by our dominant market position in business analytics. On the vendor side, if your company plans to deliver some sort of on-demand access or service, your end customer will want to see analytics. Embedding SAP BusinessObjects solutions into your application can help provide those analytics with minimal development time or cost. And the payback is swift. According to IDC, partnering with SAP for BI and analytics functionality achieves an average ROI of 235% with a mean payback period of 6.3 months.1

Who Is a Candidate for the OEM Program?

A wide variety of companies, industries, and business models comprise SAP’s OEM partner program. The largest percentage is made up of independent software vendors that leverage a piece of SAP technology to enhance their own solution. Some of the most rapidly growing partner segments are cloud and software-as-a-service (SaaS) partners and content providers. For example, Taleo is a cloud-based talent management solution provider. Its core expertise is talent-focused technology. To enhance its own solutions, Taleo has leveraged SAP BusinessObjects dashboard technology, improving its customers’ experience and productivity by providing the talent intelligence necessary to better know their people and grow their businesses. Taleo currently serves more than 5,000 organizations that cover over 3,000,000 users.

Another example comes from Epic, which supplies clinical applications to hospitals that enable them to make life-saving decisions, quickly and efficiently. The company has leveraged SAP’s business intelligence capabilities through an OEM partnership to provide functionality that helps its hospital customers meet federal spending regulations in an era where healthcare costs are spiraling out of control.

It’s not just independent software vendors that are leveraging the OEM partner program. Any company that develops software is a possible candidate. For example, a utility company may not be a traditional OEM partner for SAP — they would typically engage with SAP as a customer. But utilities often develop their own industry-specific IT solutions, which also need some more generic functionality, such as a billing capability. Through the OEM partner program, a utility company can embed the billing solution that SAP has already developed to improve the utility’s own solution (learn more about this topic in the Transform Your Business Model section).

The advantage to the partner — including those that have the in-house capabilities to develop the functionality — is that the partner doesn’t need to spend the development time and money on a non-core portion of its solution. It can get to market more quickly. When each partner focuses on what it does best, we’re able to bring a higher quality and more compelling solution into the marketplace. And if that company is already an SAP user, it likely has the in-house expertise to make the most of the OEM partnership.

This program and its associated technology platforms allow participating companies to focus their valuable development resources on their core strengths and accelerate time to market, all with the backing of a recognized industry leader, rather than an untested partner or a homegrown solution. For example, a partner in the banking industry wanted to offer a white-glove service to its most valued corporate customers. By leveraging SAP Crystal Reports and SAP Crystal Dashboard Design through the OEM program, it has developed a new interface to its systems specifically for those customers. The partner could have developed the interface internally, but the OEM option expedited the process significantly.

A Triple Win

SAP’s OEM partner program is truly a win-win-win for all parties involved. SAP’s technology is brought to a new audience. Partners benefit from the heavy lifting SAP has already done in these technology platforms. And best of all, end customers get what they need from the combined functionality. From the customers’ perspective, it rarely matters what vendor built what — as long as they can do their job better.

Carolee Gearhart
Global Vice President, OEM
SAP

 


Transform Your Business Model:
Moving to a Services-Based Model Requires a Monetization Strategy and the Right Business Processes to Execute It

With increasingly complex customer demands, new regulations, shrinking margins, and new competition at every turn, many companies that want to differentiate themselves in the market are looking to package and sell their core value through creative, services-based business models.

There are many examples of companies that have made this shift. The most successful companies have been able to leverage new relationships with many different types of partners. These companies can see dramatic increases in market value when they offer more innovative and value-based services — and monetize them intelligently.

To help companies create these monetized services and accelerate the return on their investment, in addition to its numerous directly sold solutions, SAP offers a set of next-generation billing solutions that work as part of an original equipment manufacturer (OEM) model, allowing companies to package these SAP solutions into their own service offerings. This equips those offerings with proven functionality that will greatly improve the customer experience.

Before we explore the consume-to-cash business process in more detail, let’s step back and explore the unique challenges that service providers might face.

Challenges in the Services Market

In today’s hyper-connected world, there are many opportunities and venues for new and innovative services. These services can include everything from machine-to-machine (M2M) applications silently controlling the heat and lighting in your office, to location-based services on your in-car navigation system, to the Internet-based services that we use every day.

With more than a trillion connected devices expected to be in use globally in the coming years, companies are fundamentally rethinking how they do business. But, this proliferation of services and connected devices also brings a new set of challenges (and opportunities) for companies in this market. For example:

  • Customers typically pay as they consume a service rather than making an investment up front. So costs for switching service providers are lower and, consequently, customers tend to shop around more in services.
  • There are greater requirements to enable dynamic collaboration among companies so that they can jointly deliver a service to customers. In this space, companies need to be able to constantly shift the scope of their offerings to capture more value.
  • Service development happens in shorter life cycles than product development, and good ideas get copied rapidly.
  • The service economy is not characterized by tangible goods with values that can be pegged to a cost of materials, but by intangible goods with values that are a function of a variety of factors.
  • Smart service companies actively involve customers in product design. To do this, companies have to be able to see how customers use their services daily, and test how customers will react to small changes in the service.

To keep pace with these trends and launch new services, companies need to be able to support a large number of customers with huge transactional usage volumes. At the same time, they must maintain differentiation, increase average revenue, and ensure customer loyalty. They have to identify their most profitable customers and offer them the services they want at a price that keeps them coming back.

Another consideration for companies looking to move to a service provider business model is the need for a multi-sided business model. Such a model enables more radically complex business relationships in which each participant plays multiple roles in the creation and consumption of data services. On the upside, for the service provider, delivering new third-party solutions creates additional value and customer loyalty, broadens the customer base, and consequently attracts even more third parties in a snowball effect. Consider, for example, the telecommunications industry.

Yesterday’s telecommunications business model, in which each operator provided services to a single audience of retail customers, is giving way to the multi-sided business model. In this new environment, telecommunications providers often buy, sell, or facilitate content and services from a network of partners and deliver or distribute these offerings to customers, including consumers and businesses. As operators monetize a variety of new services and assets, the complexity of offerings and audiences grows and the number of upstream partners and downstream customers expands exponentially. This means that telecommunications providers have had to convert their internally focused capabilities into open platform services with the appropriate supporting business processes.

Support Your Dynamic Consume-to-Cash Business Processes with SAP

To help service providers reduce the costs of developing a monetized service and enable faster service delivery, SAP offers a set of modular solutions to support the consume-to-cash process (see Figure 1); the solutions provide the unique capabilities that a monetized service offering requires so that the service provider need not build these capabilities from scratch. Let’s go back to our telecommunications scenario, for example.

Figure 1 SAP’s offerings for the consume-to-cash business process

For these telecom providers, SAP provides SAP Convergent Charging, which includes service pricing and modeling capabilities, a rating and charging engine, and automated partner settlement. SAP Convergent Charging is the market’s most advanced and innovative pricing solution; based on a patented decision-tree technology, it allows business, as well as operations teams to model any type of price plan — from the simplest to the most sophisticated — through a hugely intuitive and flexible user interface, and without any programming. Voice, data, content, cloud services, postpaid, or prepaid, all the services offered by a telecommunications service provider are handled by SAP Convergent Charging.

The use of a single pricing engine enables cross-product promotions and dramatically reduces the cost of operations. And the same pricing engine is also already used by many other industries such as media, financial services, transportation (road tolling and ticketing), utilities, and logistics. SAP Convergent Charging offers a deep and well-documented set of application programming interfaces (APIs) and an integration framework and toolkit to help other OEM partners build their solutions. SAP Convergent Charging also integrates with a range of charging architectures in a variety of environments, preserving users’ investment in their existing infrastructure. It’s perfect for embedding within an existing solution and making it available to customers via an OEM business model.

SAP Convergent Invoicing and SAP Customer Financials Management are two powerful add-ons to SAP Convergent Charging, completing the pricing engine with extensive billing and cash collection capabilities. In fact, embedding SAP Convergent Charging in equipment or a solution enables and monetizes new business models. There are several applicable use cases.

  • Telecom equipment: Eases adoption and integration of new network solutions by telecom providers
  • Tablets and smart devices: Enable usage-based pricing models and revenue sharing for content, games, and apps
  • Toll collection and ticketing systems: Enable pricing models for anti-congestion policies, variable road tolls, and parking fees
  • Telematics and automotive equipment: Monetize content and apps, in addition to pay-as-you-drive services, such as insurance premiums
  • Smart meters: Offer a flexible pricing solution to ease introduction of new services and models (such as a prepaid model)

Companies can also integrate SAP Convergent Charging, or any of SAP’s other modules of the consume-to-cash process, in a private cloud to offer universal or multi-industry billing as a service. There are two main use cases: 

  • IT and telecom service providers who can offer advanced billing services from a private cloud environment
  • Independent service vendors who can add best-of-breed, multi-industry billing functionality to their solutions

Learn More

For companies in the service provider industry — or for those considering shifting their business models to include services — a variety of challenges and opportunities await. To help overcome these challenges and make the most of the opportunities, SAP offers several modular solutions that these providers can make a part of their service offering to not only reduce the development workload, but also ensure that the end customer experience is seamless.

To learn more about SAP’s consume-to-cash solutions, visit http://www1.sap.com/software/consume-to-cash.epx.

Fergus O’Reilly
Chief Solution Expert
SAP Consume to Cash
SAP

 


SAP’s OEM Partner Program by the Numbers

There are a number of reasons to become an OEM partner with SAP. First and foremost is the convenience and value that comes with leveraging industry-leading technology platforms that SAP has already developed. OEM partners can build upon these platforms and integrate them into their solutions to meet their customers’ specific needs. But there are a variety of other benefits to participating in SAP’s OEM partner program.

5 Benefits of the OEM Partner Program

  1. SAP’s OEM partner program focuses on areas where SAP has proven industry-leading technology: analytics, mobility, cloud computing, in-memory, and more. Members of the program can spend less time evaluating the technology and more time determining how best to leverage it within their own solution.
  2. At 15 years and counting, SAP’s OEM partner program is one of the most established and reputable in the IT space. In that time, the program has been expanded and optimized to speed technology delivery and improve partners’ time to value. 
  3. Participants in the program get access to SAP’s ecosystem of more than 7,000 SAP partners to add even more value to their solutions. Flexible agreements and contract options let program participants approach product development in their own unique way to develop the perfect solutions for their customers.
  4. Why spend precious development resources to re-invent the wheel? Partnering with SAP allows companies to focus on developing the unique aspects of their solutions and not the areas where they have less expertise. That translates into lower overall costs and faster time to market.
  5. When you give customers what they want, they usually want more. By increasing the value of your offerings with embedded SAP software, you provide your customers more value, which often translates to increased revenues.

4 Questions to Determine If Your Company Is a Candidate for the OEM Partner Program

SAP’s OEM partner program is growing and rapidly developing new platforms for an increasing number of companies and industries. To determine if you think your company could benefit from participating in the program, answer these questions:

  1. Are you a software vendor looking to increase revenues while conserving development resources?
  2. Does your organization develop software and offer it as part of a paid service to customers?
  3. Does your organization need a way to provide reports on unstructured data from sources such as blogs, emails, and social media?
  4. Do you provide marketing solutions, data enhancement services, or direct mailing solutions?

If you answered yes to any of these questions, you are a candidate for SAP’s OEM partner program.

5 OEM Partner Examples

The previous story by Carolee Gearhart highlighted the experiences of two companies (Taleo and Epic) that have benefited from the OEM program. Here are five more examples.

  1. CA Technologies: CA Technologies works with its customers to develop IT management solutions that help them manage risk, improve services, control costs, and align IT with the business. CA Technologies uses SAP Crystal Reports to simplify the reporting solutions it offers customers and deliver consistent reporting and analytics functionalities across its product lines.
  2. Callidus: Callidus develops industry-leading solutions that manage the entire sales life cycle and provide visibility into sales operations and financial performance, from onboarding and deployment to pay for performance, and talent development. Callidus’ solutions embed SAP Crystal Reports and SAP Crystal Dashboard Design to give its customers the benefits of on-demand software without sacrificing any functionality, control, or security.
  3. Mincom: Mincom provides enterprise asset management solutions and services to customers in a variety of asset-intensive industries. Embedding SAP business analytics software into Mincom’s offerings provides its customers the ability to further optimize their asset performance for improved efficiency and reduced asset downtimes.
  4. Oniqua: Oniqua provides asset performance management solutions to help organizations maximize profits by minimizing maintenance, repair, and operations asset waste. Incorporating SAP BusinessObjects technology into its OAS Reporting solution provides users expanded analysis and reporting options, including the capability to run reports on automatic scheduling, distribution, and publishing. This allows Oniqua’s customers to reduce asset downtime and costs and to increase productivity.
  5. CliniSys: CliniSys developed its PathManager advanced management reporting solution to meet the increasing demand for improved business intelligence and knowledge management in healthcare. By embedding SAP solutions into its own, CliniSys helps its customers improve cash flow, increase efficiencies, and access information faster to meet key targets for care provision.

More Platforms, More Industries

The OEM partner program is expanding in terms of both the technology platforms it provides to partners, as well as the types of industries it can bring benefit to (see Figure 1).

Figure 1 The growing list of industries and platforms that SAP’s OEM program supports

For More Information

To learn more about SAP’s OEM partner program, go to www.sap.com/partners/partnerwithsap/oem/index.epx.

 


1 IDC,“Enabling Software and SaaS Vendors to Gain Competitive Advantage: Partnering with SAP for Business Intelligence and Analytics to Achieve Rapid ROI“ a study conducted for an SAP-sponsored white paper (November, 2009). [back]

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