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SAP: iTunes for Business?

by Eric Duffaut | SAPinsider

April 1, 2012

These days, consumers are used to being able to easily download music, videos, and apps through iTunes. Through that single platform, users can access offerings from a variety of sources. SAP has applied this same concept, making scores of applications, services, and technologies from its partner ecosystem available to customers through SAP platforms. In this executive Q&A, Eric Duffaut, president of SAP Global Ecosystem and Channels, discusses SAP's partner ecosystem and exciting co-innovation plans for the future.
 

Got iTunes? We imagine most SAPinsider readers do. The ease with which we avail ourselves of music, videos, and apps, carry them around in our pockets, and update and manage them belies the richness of the enabling business strategy — the powerful, seamless coupling of the Apple platform and the offerings provided by a vast and vibrant partner ecosystem.

When this concept is applied to SAP platforms, scores of applications, services, and technologies become available to customers from a prequalified and highly orchestrated partner community. That partner ecosystem is shaped by Eric Duffaut, president of SAP Global Ecosystem and Channels.

Duffaut places resources at partners’ disposal to build offerings that SAP customers can easily leverage in their own environment. Today, the SAP partner ecosystem includes more than 11,500 reselling, software, hardware, technology, and service partners. In 2011, the partner ecosystem accounted for roughly 30% of SAP’s software revenue. In 2015, this number is expected to be more than 40%.

In the months and years ahead, SAP will continue to deliver many new business solutions to customers. These solutions, however, will be dwarfed in number by the new offerings that emerge from the partner ecosystem. In this interview, Duffaut discusses the onslaught of partner offerings and the imperative of co-innovation.

Q: In recent months, you and other executives have said that SAP has the ambition to become the iTunes for business. Could you please elaborate?

A: On many levels, I’d say it is an apt comparison. The vast partner offerings you find on the iTunes platform are what make it so compelling. We are developing the same concept in the business arena. Our strategy is to work with our growing partner ecosystem to offer SAP customers multitudes of applications, technologies, and services that cater to diverse industry and business needs — and thus provide customers with choice. We’re an open innovator.

In fact, for our newer innovation areas — mobile, database and technology, and cloud — what we offer are mainly platforms. And these platforms are nothing without applications. SAP develops applications, but our partner ecosystem develops many more to fulfill a wide range of industry, regional, and market-specific customer needs. Think about mobile apps developed on SAP’s mobile platform. Think about new analytics applications powered by SAP HANA. These are just a few examples. By the end of the year, we will have added thousands of new applications built on our platforms.

Like the iTunes and App Store model, it is the ecosystem that will bring customers many options for applications, business expertise, and industry know-how on top of our platforms. The SAP Store for Mobile Apps is a great example. You can go there and purchase various applications. I travel quite a bit, so among my favorites is the SAP mobile app for travel and expense. And I know salespeople who really like the Go Order mobile app from our partner Advent Global Solutions, which allows users to view the master data of customers, products, and sales orders on the go.

However, there is a major difference between business-to-consumer and business-to-business applications. When I download something from iTunes, I’m not too concerned with things like implementation costs, TCO, security, or time to value. But these are very important considerations for business-critical enterprise applications and are therefore among the key criteria my organization evaluates when certifying partners and onboarding their offerings within the ecosystem.

Q: Innovation cycles are a logical time for customers to be looking at the SAP ecosystem. Can you comment on the rate of innovation you are seeing across the SAP customer base and the contributions of the ecosystem?

A: Every customer I speak with these days is embarking on an innovation journey and changing or reinventing the way it does business. Innovation has always been a prerequisite for growth. Some customers even find that they must innovate to survive. As a result of that innovation, some executives want to carry their business in their pocket and have real-time access to updates and information to mobilize their workforce and make people more effective and productive. They want their business applications to be as portable and accessible as their song libraries, leveraging the latest cloud computing and mobile innovations. How they do this and what specific applications they run often come from our partner ecosystem.

Other customers are expanding into new geographic regions. For this, they turn to service providers with expertise in their specific market space. There appears to be no shortage of innovation projects right now.

Herein lies the power of SAP platforms. We provide customers with the opportunity to run their business more effectively, reinvent their business models, and unwire and empower their employees. Partners are the value multipliers in that equation. From them, customers can get complementary solutions tailored to their specific requirements and with a shorter and more cost-effective time-to-value cycle.

In short, thanks to the broad partner ecosystem, SAP provides customers of all sizes choice and value second to none.


Q: What is the size and make-up of the partner ecosystem, and what conclusions can customers draw from this?

A: Our revenue from partners now represents about 30% of SAP’s total software revenue, and this number will only continue to grow. This represents a big jump in partner business since my first interview with SAPinsider.2 It was about this time last year when I first shared our co-innovation strategy with readers, asking that they take a critical new look at what partners can do for their SAP environments and investments.

One year later, we find the market rewarding this co-innovation strategy. We can measure success by looking at three key areas:

  • Customer relevancy. The 30% revenue figure I cited offers quantitative validation of the strategy. There’s also a qualitative gauge. When we meet with customers, we realize there is no “landscape of one,” and there is no “mindset of one.” We hear: “We all have heterogeneous IT landscapes. Why? We all want to partner with the best.” That’s why our customers choose SAP in the first place. SAP innovates and offers choice.
  • Partner engagement. More than 11,500 partners now swell the ranks of the SAP ecosystem, and they are delivering an unprecedented number of applications.
  • Diversity. Customers are exercising their ability to choose within the SAP ecosystem like never before. We’re seeing customers adopt a very broad mix of solutions and services. It’s indicative of the fact that SAP is not just an ERP company anymore. We also have analytics, mobile, database, and cloud platforms, and these are all bringing new types of partners to SAP in just about every category: hardware vendors, service partners, resellers, redistributors, OEMs, and software solution providers. Our plan is to accelerate this co-innovation.

As for key conclusions, that’s simple. The combination of SAP solutions and platforms and partner offerings creates a whole that’s far more valuable than the sum of its parts. It’s an undeniably winning strategy. We’re staying the course. SAP regards the partner ecosystem as being vital to customers’ success as well as our own, and we will continue to effect significant market expansion through our partners and channels. 

           
       

Eric Duffaut
President
SAP Global Ecosystem and Channels
SAP

           

1 You can access the SAP Store at www.sapstore.com and the SAP Partner Finder at smepartnerfinder.sap.com. [back]

2 See “Maximize the Value You Get from SAP with the Vast — and Expanding — SAP Ecosystem” a Q&A with Eric Duffaut, in the April-June 2011 issue of SAPinsider. [back]

 

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