SAP CEO Interview

Systems Management Pipeline has an interview with SAP CEO Henning Kagermann:

…What was missing were the companies that wanted to be different from others and have competitive advantage. They could not do this with SAP [software], which was not that open. The value proposition now [with the new platform] is that you get both. You can combine best practices with innovative practices. In order to deliver on that, we had to change our architecture and underlying software — which we did. It’s called an Enterprise Services Architecture, and it’s based on a business-process platform. This is a broader platform than others because it brings the applications with it as well. So it’s in the same space as IBM.

We have 30 percent of our revenue coming from the midmarket. This is not all channel. It’s channel and direct sales, but it gives you a feeling that we are a leader in the midmarket, which people don’t often know. We are larger than anyone else worldwide. We sell three products: Business One, All in One and ERP. At the higher end, people go more for the suite products; at the lower end, it’s Business One. The midmarket for us are companies below $1 billion. At the end of the day, this is a segment we are going after with different products, and because the midmarket is so large I think you can go with direct and indirect sales. What we want to do is strengthen the indirect channel for better coverage. And the goal is to have in 2010 a ratio of 60/40, with 40 percent of revenue coming from the midmarket. We expect half of the midmarket business to go through the channel.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.