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SAP wines and dines SMBs

Opinion
Aug 07, 20033 mins
Enterprise ApplicationsSAP

* Can an enterprise company successfully market software downstream?

I have some “dubiosity” when enterprise firms go down-market because they often approach smaller businesses clumsily and leave in frustration before long. So when SAP recently invited me (as a computer services business owner) to a presentation of its new integrated suite of accounting and business management software, Business One, I agreed to come – but only as a nosy journalist looking to talk to partners and customers. SAP agreed.

SAP launched Business One last spring, 14 months after acquiring the developing company. As such, Business One doesn’t share a code base with other SAP products, meaning it was developed for SMBs rather than being a cut-down version of enterprise software, says Gary Fromer, SAP senior vice president for small and midsize businesses and SAPHosting.

Pricing for Business One is $3,750 per user for the entire suite, rather than a separate price per module like competitors. You won’t find that pricing listed anywhere by SAP, because big companies with expensive products hide the price until they convince you the product is worth twice what they’re asking. Fromer declined to give sales numbers, but said “more than a handful” of Business One installations are up and running nationwide.

But based on what I saw, SAP may have hit upon the right approach to selling to SMBs and offers two lessons to valued-added resellers (VAR): how to sell high-end products, and how to get committed partners to help you.

First, getting SMBs to attend an evening event costs money and requires a large net to gather a few prospects. SAP held the dinner and pitch event at the Adolphus, an executive-class hotel in downtown Dallas. More than 2,000 people were individually invited by phone. About 250 agreed to attend, and about half that showed up. The lesson? Invite enough people to make a 5% attendance rate worthwhile. If five of the 125 attendees buy the software in the next quarter, SAP’s resellers will consider the event successful. If you sell high-ticket items, this type of sales will be used by your competition.

One of the two VARs hosting the event with SAP detailed the high level of commitment his company has made to SAP in hopes of high return. The fee to register was about $10,000, which includes a three-week employee training session within the first 90 days. Travel expenses are incurred by the VAR, as is the cost in employees’ lost time. SAP also demands attendees pass a three-hour certification test, which three of the VAR’s employees have done, with eight more in the queue.

If a reseller like this competes with you, can your salespeople match this level of expertise and training? The VAR hasn’t sold a system yet, but has five serious prospects and one “about to sign.” In spite of the big resources behind this big marketing push, sales like these take time. Your lesson here is patience, painful as that may be.

For details on the product, head to https://sap.com/solutions/smb/businessone >. When I hear of a Dallas-area company installing Business One, I’ll report its experiences.