Once again, SAP partners were instrumental in delivering cloud-based solutions necessary for customers to transform their businesses in 2018. This year, the stage is set for even greater opportunity.
SAP’s Global Partner organization reported 65 percent growth in year-over-year cloud sales last year and 49 percent growth in the general business segment.
This performance set the stage for a pivotal 2019, as SAP is poised to launch its next-generation partnering strategy that will pave the way to double the company’s partner economy by 2024 and drive customers to become intelligent enterprises.
“As we transition from an application economy to an innovation economy, the partner-customer relationship will become even more important,” said Karl Fahrbach, senior vice president and COO, Global Partner Organization, SAP. “Our customers in the cloud want the expertise of their partner throughout their entire SAP experience. So we’re enabling our partners to do more to create their own IP, applications, and services to help customers become best-run businesses.”
SAP’s partner economy—the sum of all SAP-related revenues that partners earn with customers, such as fees in revenue-share commercial models, sales of partner-created innovations, plus all services, integration, and implementation fees—is expected to double by 2024 to $200 billion, according to IDC. More than 60 percent of that net-new opportunity will be based in cloud, thanks in part to the transformation SAP partners are undertaking—moving from a reselling and implementation model to more dynamic, lifecycle-based models that focus on providing roles and functions related to specific customer needs.
SAP’s goal, Fahrbach said, is to create new and flexible ways for partners to work with the company. That’s already underway in programs such as SAP PartnerEdge Cloud Choice, profit option and SAP App Center and will continue in 2019 with additional tools that make it easier to work with SAP and help partners transform around cloud, intelligent solutions, and the customer experience.
“Partner growth will be driven by our strategy of delivering the Intelligent Enterprise and a shift away from a heavy focus on SAP-led application innovation value created by our partners,” Fahrbach said.
“We will invest with our partners to create specialized IP and best practices that are delivered in packaged, standardized solutions, leveraging our intelligent technologies like artificial intelligence (AI), the Internet of Things (IoT), machine learning, blockchain, and SAP Cloud Platform.”
IDC predicts that SAP partners that create and sell their own software in the cloud will grow the fastest—24 percent annually between 2018 and 2023. SAP recently announced free access for SAP partners to SAP Cloud Platform, offering them testing, demonstration, and development licensing services. This open platform as a service (PaaS) acts as a single framework for SAP partners to build and extend on existing SAP solutions.
Farhbach says partners are the ‘feet on the street’ that will bring SAP efforts and messaging around intelligent enterprise to SMEs around the world by providing real-time access to SAP innovations.
Partners account for 83 percent of SAP’s new customers every quarter in general business. All general business regions and all cloud solutions posted double-digit sales growth in 2018, and the digital sales motion now accounts for nearly one-third of all sales in general business through commercial sales.
“The GB space has opportunity for everyone, everywhere. Working closely with the partners that live and breathe this space every day will help SAP close more deals more quickly,” Fahrbach said.
“Many of us have a saying inside SAP: ‘With partnership comes possibility.’ That’s never been more true going forward. Every customer has its own unique needs and requirements. Every partner has the opportunity to provide the market- and industry-specific innovations necessary to make that business the best.”