How to Build a VAR Network

Photo: iStockphoto
Photo: iStockphoto

Even the best SAP partners can’t be everywhere and do everything themselves. Just as the SAP PartnerEdge program provides the infrastructure for a valued ecosystem throughout the world, the SAP Extended Business program which is part of SAP PartnerEdge helps partners fill in “white spaces” from both industry and geographical perspectives.

“The beautiful thing about this program is that it pays for itself, if you go about it the right way,” says Tomas Fertig, co-owner of Crystalis Consulting and CEO of the company’s operations in Mexico and Central America. Crystalis Consulting, an SAP channel partner, joined the SAP Extended Business program as a master value-added reseller (master VAR) in 2009. Today Crystalis operates an ecosystem with more than 30 members and millions in incremental revenue.

What is it?

The SAP Extended Business program enables established SAP channel partners like Crystalis to form effective ecosystems with other IT specialists (that subsequently become members of the SAP Extended Business program) that do not have a direct relationship with SAP. John Scola, vice president channel expansion SAP, says, “SAP partners who were already partnering with other firms were looking for a way to formalize that engagement. So, we provided them with a framework to enable them to manage their partnership in their ecosystem in a fair and efficient way.”

Launched in 2008, the SAP Extended Business program already has more than 1,500 members globally. While these members do not directly resell SAP solutions, they promote and implement them through a master VAR.

Next page: How SAP Extended Business Program benefits all parties

A master VAR is an existing SAP channel partner who becomes a sponsor for the SAP Extended Business program. But not just any SAP channel partner that is authorized to resell SAP Business One, SAP Business ByDesign, SAP Business All-in-One and business intelligence solutions from SAP BusinessObjects can become a master VAR. Partners must meet criteria such as already being an SAP gold partner in the SAP PartnerEdge program, having dedicated resources in place to manage members of the SAP Extended Business program, and having an existing pipeline of member applicants. More than 100 master VARs worldwide already run their own partner ecosystem.

SAP continuously works with its ecosystem to expand market coverage, enhance the solution portfolio and drive innovation. The SAP Extended Business program is an important part of SAP’s goal of serving the SME market 100 percent via the indirect channel by 2015.

All Parties Benefit

The SAP Extended Business program is set up so that all parties involved benefit from the relationship. The master VARs gain additional sales coverage and a highly increased addressable market from both the industry and geographical perspectives. Sponsoring a network of SAP partners also elevates a master VAR’s implementation capacities as well as proximity to customers and prospects. Yet another advantage: by increasing the revenue and transaction volume a master VAR continuously secures its standing in the SAP PartnerEdge program.

“Master VARs look to their extended business members for additional expertise across many business areas – like host capabilities, demand generation, consulting, industry expertise, and geographic coverage – that can help both entities grow together,” says Scola.

Members of the SAP Extended Business program also benefit. There are no program fees. Members are compensated on software license revenue, and they have the opportunity to provide implementation and consulting services. Additionally, they can leverage SAP business opportunities with minimal investment and commitment. And, if they become interested in joining the SAP PartnerEdge program as a full member, they are already halfway there.

“The relationship has taken us closer to the SAP organization in a manner we were unable to achieve before,” says Mario Gutierrez, CEO of Dintec Consulting in Mexico City, in describing the benefits his company receives from its EBM relationship with master VAR Crystalis Consulting. “We’ve had great assistance in training our marketing and sales personnel to better understand the SAP methodology, from finding qualified prospects through to closing sales with Crystalis.”

Secrets to Success

Compass Business Solutions (Shenzhen) Limited, an SAP partner based in southern China, is a master VAR and a sponsor for the SAP Extended Business program. Compass is authorized to sell, build, and deliver SAP Business All-in-One solutions, the SAP Business One application, the SAP NetWeaver technology platform, and SAP BusinessObjects solutions. Talking about best practices Compass follows for running the SAP Extended Business program, David Lee, Channel Director at Compass Business Solutions (Shenzhen) Limited says: “Recruiting the partner who shares the same core values, having a dedicated person to manage the program, and obtaining continued support from SAP are the key success factors in the program.”

For additional information, see the SAP Channel Partner site.