Serving Global Markets Locally

Feature Article | April 20, 2009 by Anna Simmes

Hans-Peter Klaey, SAP’s president of Global SME (Photo: SAP AG)

Why are small businesses and midsize companies so important to IT vendors? How is SAP serving this market?

Small and midsize enterprises, or SMEs, are hugely important to the global economy. They have to be successful in their local and regional markets and, increasingly, even in global markets. To do so, they are investing in IT that can grow with them and give them precisely the support they need – which makes this segment very interesting for SAP. So we want to get even more involved in it and expand our portfolio of products that are especially designed for SMEs. More than ever, potential customers want hard facts about the value added and the time it takes to achieve this. They also want examples of reference customers.

The size and revenues of SMEs vary a great deal, which makes it impossible for a single solution to address all needs. What is SAP’s strategy here?

Customers need solutions that fit their specific situations. They also need crystal-clear statements about the investment required, the project work, and the operating costs. That is precisely what we can offer. You see, it isn’t just about the size of a company; it’s also about the unique requirements and business situation.

Let me explain our strategy this way: We have different products for different situations. Basically, we offer the SAP Business One application for small businesses with up to 100 employees. For companies with 100 to 500 employees, the SAP Business ByDesign solution is the best choice. Finally, for companies with up to 2,500 employees, we recommend the SAP Business All-in-One solution.

That’s what makes us so strong in the SME market: We have the right solutions for each situation and industry, and our systems can grow with the customers as they expand and their requirements increase. Together with our partners, we help customers determine the best solution for their company.

SAP is widely regarded as the market leader for large companies. While it also claims to hold this title in the SME segment, not all market analysts or market representatives agree. Why is that, and what can SAP do to improve in this area?

Market experts confirm that we are also the leading vendor in the SME market. In my opinion, this is due primarily to our qualified partner network and our industry-based solution portfolio. We’ve got to get the message out there that the midmarket benefits from our software just as much as large corporations do. But the numbers speak in our favor: We acquired 40% of our SME customers worldwide in the last two years.

Whereas SAP Business All-in-One and SAP Business One are selling well, SAP Business ByDesign hasn’t been released yet to the general market. Isn’t the world ready for on-demand?

We are working on the solution to ensure that we set new standards for the quality and functionality of on-demand software. Feedback from customers and partners confirm we’re on the right path. We’re developing a profitable business model for SAP Business ByDesign. With feature pack 2.0, for example, we will significantly expand its functionality. Using software in an on-demand model is new for our customers, for our partners, and even for us – so it makes sense to take a step-by-step approach. Nevertheless, on-demand software for small businesses and midsize companies is a very appealing model with great promise.

SAP Enterprise Support services have been criticized by many small and midsize customers. Is their criticism justified?

SAP Enterprise Support delivers better service for customers of all sizes. We can, however, improve how we communicate the additional benefits that it offers. That will take hard work at events, in our media, and in discussions with customers. Many SME customers do business globally and network with other companies. That makes it harder for them to maintain their system landscapes – which is exactly where SAP Enterprise Support comes in.

SAP works closely with partners to serve the SME segment. These partners serve thousands of customers every day. How does SAP support its global partner network?

Our SME strategy is based on market expansion, precise solutions, and sales partnerships with qualified SAP partners that help us supply the market with industry-specific solutions. One of the cornerstones of that indirect sales approach is the SAP PartnerEdge program, which enables us to provide services and contacts for our partners.

Our service centers are available to partners worldwide 24/7 to make sure they have everything they need. We’re continually expanding our partner program. In addition to SAP PartnerEdge, we announced several new programs in 2008 to help the partners of our partners collaborate with us even more effectively.

Is SAP’s strategy for SMEs local or global?

We follow a global strategy that leaves sufficient leeway for local variations. Also, we’ve started incorporating country-specific requirements into our products in the development phase. Our partner programs are also adapted to the local sales regions and use local resources. Essentially, we have a universal approach that we can use everywhere, with local adaptations and enhancements.

Since our standard solutions can be easily adapted to local and customer-specific requirements, we’re also successful in emerging markets such as China, India, Brazil, and Russia.

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