SAP A1S to change how SAP partners deal with SMBs

SAP partners said they welcome the SAP A1S small-business product, but realize it will also bring changes to revenue and sales strategy.

Most of the talk about SAP's A1S product has been about its small-business focus and Software as a Service (SaaS) delivery model. But when SAP launches the product in New York today, it will have to talk more about the authorized partners it is counting on to sell the service to small and medium-sized businesses (SMBs) -- and explain to many for the first time what that will require.

SAP A1S expands SAP's list of products for the SMB market, which previously included All-In-One and Business One. It also represents the first opportunity for many SAP partners to enter the SaaS market.

"I don't really know yet what that looks like entirely," said Forrest Koch, CEO of Bellevue, Wash.-based SAP reseller Omega Business Solutions. "The revenues are deferred because the customer pays a subscription rather than purchasing software, so there's a cash flow issue," Koch said.

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Nevertheless, Koch, whose company sells SAP's Business One product, is planning to train his staff on SAP A1S in the fall and bets there will be opportunities for A1S among his 52 customers.

"A1S will be a higher-level, more functional system than Business One. It will be between SAP Enterprise and Business One in terms of its functionality and the size of the organization that it could be relevant for," Koch said.

Additionally, there is a growing demand for a SaaS product among SAP customers, according to Scott McMahon, managing director of Apollo Consulting LLC, a company that sells SAP's Business One software.

"In the market today we don't really have an offering to companies that ask for SaaS," McMahon said. "Companies tell us they don't want to have IT staff and they want to be able to pay as they go without having huge upfront costs."

"I think there is demand for the product and it will sell itself," he added.

That said, however, McMahon explains that selling SAP A1S will change his company's sales approach. He anticipates hiring four additional people by the end of the year who will be experts in SAP A1S. That is different from selling Business One, where a sales team goes out to demonstrate the product, he said.

"We are going to be working with more customers who will be testing the software before buying. Also, because the system is accessible anywhere and it is not on premise, the consulting approach is going to be different; we'll be able to do Web-based training and online support," McMahon said.

Moving forward, SAP executives are relying on their current partner base to pick up business for SAP A1S.

"Without question our existing All-In-One and Business One resellers represent opportunities for us to recruit them into A1S as we launch the solution and as we develop the market for it," said Michael Sotnick, SAP's senior vice president for small and medium-sized businesses.

Sotnick also said SAP has recruited 60 new resellers since the beginning of the year to resell the All-In-One and Business One products.

"I expect to recruit roughly that number between now and the end of the year, so we are open to discussions with all types of partners, and it's really an exciting time for us," Sotnick said.

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