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SAP channel chief urges partners to sell Business ByDesign

When SAP AG launched its Business ByDesign SaaS product on Wednesday, execs said the company is relying on its solution partners to sell the product, whose delivery model and target customer base are both new to SAP.

Michael Sotnick, SAP's senior vice president for small and medium-sized businesses (SMBs), is charged with looking for the right resellers to do the job.

He sat down yesterday with's Nicole Lewis to talk about how SAP solution partners could profit from the Business ByDesign SaaS product.

What are the top agenda items facing you as you set about the tasks of growing the channel and enlisting new partners to sell your Business ByDesign SaaS product?
The imperatives for SAP are largely unchanged -- it's to grow capacity, grow coverage in the small and midsized space. If I look at the things that concern me or give me confidence that there are lots of opportunities out there and where our challenge is, it's how do I take my top partners and take them from a product-centric play that they've had today and evolve them into a portfolio play.

That is a great opportunity, and what's cool is my top partners get it. They are as hungry to get to a portfolio position with SAP as we are for them to get to that portfolio position. How will the channel partners make money with Business ByDesign SaaS as opposed to on-premise applications?
Three ways: They are going to own the relationship with the customer -- that means they are going to contract Business ByDesign license agreements that will be tied to the Software as a Service monthly subscription rate and they will make margin on that transaction.

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Number two, these partners are expert at helping companies transform their business processes and that is paramount in Software as a Service play.

Number three, data migration tools. What's great about a Software as a Service offering is it's the same rough-and-tough, it's the same solution and so the ability for partners to get out in front and invest in a Lawson-to-SAP data migration solution or a Take Stock-to-SAP data migration solution is a great opportunity to make incremental dollars. How will you actually separate your direct channel from your indirect channel as you sell Business ByDesign as a SaaS?
We take the obligation seriously to meet the market, so there will be a lot of direct touch when it comes to bringing this solution to market initially. But there is no way that SAP can scale to get 10,000 Business ByDesign customers by 2010 without the leverage of reseller partners.

So clearly on the forefront as partners invest we are going to create market for them where they will be able to take that investment and get a return by selling this solution. Where partners create opportunities through their demand generation efforts and through their own marketing efforts; going back to some of those doors that have been closed on them and leveraging that vertical know-how; understanding and doing activities in their regions or within their industry focus areas to drive new opportunities for Business ByDesign -- this is going to be their business. What are the requirements to become a Business ByDesign SaaS partner?
As part of the pilot program we are talking openly about what is the right model in terms of investment and we will come out with requirements to be a Business ByDesign reseller. You must have a minimum of X number of sales people, and X number of solution advisors, X number of services resources. So those numbers are being worked on actively.

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