What does SAP’s 2011 Q1 result really mean for the Asia Pacific region?
Author: Andrew Powell, GM Commercial
SAP announced a strong 2011 Q1 – but what are the underlying trends in Asia Pacific/Japan (APJ) right now? At SAP’s investor briefing, Bill McDermott (Co-CEO) emphasised three significant drivers of SAP’s growth in Q1 in the APJ region.
1) Indirect Channel Growth
There was a 40% year on year increase in contribution from SAP’s indirect channel. Indirect channels give enterprise software companies a wider coverage and speed to market. In many cases it also represents a lower cost model which ultimately benefits the end customer. But in my view, there is an even more important reason for this trend towards a larger SAP channel… More and more, the market is seeking a single relationship for license, services, application management and hosting. Under this single relationship model, the party selling the software is also the party who will drive the implementation and the business relationship moving forward. I admit these opinions are “self serving” as the leading SAP channel partner in APJ, but I truly believe that the indirect model supports a long term consultative approach to enterprise software solutions that is aligned with customers underlying desire to have fewer relationships to manage themselves.
2) Specialist Solution Selling Approach
SAP customers in APJ may have already had some exposure to SAP’s Specialist Sales Executive model which was a reasonably significant change to SAP’s previous direct go-to-market model. Under this new model, SAP has allocated some of its sales team into specialist focus areas (e.g. core ERP, solutions specific to the CFO, CRM, various Business Objects and Data Management components). SAP customers can now engage with a number of different sales people who know their stuff in terms of the specific part of the SAP stack they are representing. I believe this model will allow SAP to add more specialist solution areas to its portfolio over time. For SAP partners such as Extend, the opportunity lies in our ability to talk holistically with these customers across the range of SAP and non-SAP related issues. A good SAP partner has the potential to be the glue that brings together these specialist solution areas into a total enterprise application roadmap.
3) Business Analytics
Personally, I’m not sure whether it was SAP’s acquisition of Business Objects, or the Global Financial Crisis that gave the business analytics area a “push along” but I suspect it was a combination of both plus a range of other factors including lower cost of hardware and increasing volumes of corporate data in general. Business analytics tools have been around for over a decade but the last two years have seen the penny drop in the marketplace. The market is realising the bankable value in having easy access to decision useful information. Businesses want efficient integrated processes around business planning and consolidation – they want to be able to reforecast and model up changes quickly. Businesses also want high quality master data, whether it be a customer or inventory record. From Extend’s perspective we have witnessed strong levels of adoption and customer satisfaction in the areas of business analytics, business planning and consolidation, and data management/integrity.
Read our interesting post on resource planning as well.
