SAP Continues SMB Push

For some small and mid-size businesses, the word SAP may be best-known as the corporate logo on the hat and shirt of golfer Ernie Els. However, other SMBs are getting to know SAP for another reason.

SAP, which until recently has focused on software for large enterprises, earlier this week announced the expansion of its offerings for SMBs. More specifically, the company has added two new vertical industry partners (one for beverage distributors and one for consumer products and food companies) as well as two new distribution partners.

SAP said it will work with Summit Enterprise Solutions, a Denver-based company, to offer a mySAP All-in-One solution for beverage distributors. Cincinnati-based itelligence will provide a mySAP All-in-One implementation for companies in the consumer packaged goods and food industries. mySAP All-in-One is an integrated business software suite sold mainly through resellers with specific vertical expertise. With this week’s announcement, SAP now claims to offer mySAP for 28 industries.

SAP also announced that it will strengthen its reseller program through relationships with Altanta-based Enterprise Specialist Group (a division of CD Group) and Ki Solutions, a division of Axion Solutions headquartered in Irvine, Calif.

Enterprise Specialist Group specializes in working with manufacturing and consumer packaged goods companies in the southern and central regions of the U.S. and Ki Solutions will become a distribution partner for both mySAP All-in-One and SAP Business One solutions, serving SMBs in New England and also focusing vertically on the life sciences industry in the western U.S.

“You’ve been seeing the maturity of our strategy for two years,” said Gary Fromer, senior vice president, Small and Midsize Business and Hosting at SAP. Fromer also pointed out that CD Group and Axion are two of the country’s biggest JD Edwards resellers. JD Edwards is a competitor that specializes in business application for mid-size companies.

SAP’s strategy to more aggressively target the SMB market is similar to tactics being taken by IBM, Oracle, Cisco and other vendors that once relied on Fortune 1000 customers to fill their coffers. However, SAP is taking things a step further by reflecting SMB sales on its quarterly reports. “If anyone doubts SAP’s commitment to the SMB market, we are going to break out the numbers to prove it,” Fromer said.

According to financial statements released last Thursday, SMB sales accounted for 28 percent of SAP’s roughly $2 billion second-quarter revenue. Impressive, but it’s important to note that SAP defines small business as companies with less than $50 million in sales and mid-size companies as those with less than a $1 billion in sales.

Still, Fromer said, SAP is reaching companies with as few as 10 employees through its Business One product, which was released in the U.S. last spring. The turnkey application suite features modules for administration, accounting, purchasing, partner management, bank transaction, warehouse management and more tailored for small businesses. In fact, the company reports that year-to-date it has added 1,104 Business One customers.

mySAP All-in-One attracted 619 customers, according to the company. Aimed more at mid-size companies, mySAP All-in-One features prepackaged financial, human resources, supply chain, customer relationships and other business processes for ad agencies, pharmaceuticals, oil and gas, service organizations, retail/wholesale distributors and other vertical segments.

“Lots of vertical solutions provide 70 percent of the answer and then let the customers come with other 30 percent,” Fromer said. “But that other 30 percent is what the customer doesn’t know.” Getting the prepackaged business processes based on best practices gleaned from other customers and resellers is what SMBs want, he said.

Dan Muse is executive editor of internet.com’s Small Business Channel and EarthWeb’s Networking & Communications Channel.