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The growing SAP partner network

There's a buzz at work in the enterprise software market around the growing SAP partner network, and potential partners are flocking to SAP in the belief that SAP is a better partner for ISVs than Oracle, says columnist Joshua Greenbaum.

SAP needs the partners to flesh out its offerings in the many verticals that the company is active in.
Joshua Greenbaum
principal consultantEnterprise Applications Consulting

You never want to say "job well done" when the job has really just begun, but there's an interesting buzz at work in the enterprise software market around the burgeoning SAP partner network that by itself is creating a fait accompli for SAP. And the buzz – part of the undercurrent of SAP activity that the company hopes will soon blunt the increasingly strong competitive threats from Oracle and Microsoft – is getting louder all the time.

The reason for the buzz is simple: SAP wants lots of partners for its many initiatives, from NetWeaver to governance, risk, and compliance (GRC), to analytics, and is actively meeting entrepreneurs from around the country to see what a little synergy could do for them. And the partners – or potential partners – are flocking to SAP in droves – and playing to the perception that SAP is primed to be a much better partner for ISVs than Oracle is today. (Microsoft is another matter altogether: its growing influence in the top end of the enterprise software market is very much fueled by a similar "buzz" effect among its many partners.)

SAP needs the partners to flesh out its offerings in the many verticals that the company is active in. It also doesn't hurt that, in the zero-sum game of enterprise software sales, a deal that SAP can win by flaunting a partner product is a deal that Oracle or Microsoft must lose.

Part of this perception is very real: SAP has made a number of public moves to bolster its "good to partner with" image, at a time when Oracle's partnering efforts have been very much under the radar. The other factor behind the perception is that SAP is deemed to be more interested in acquiring existing partners than Oracle, which has tended to buy companies that are either direct competitors or have a specific vertical or horizontal expertise that could be complementary to Oracle's strategy – regardless of whether the vendor has ever partnered with Oracle before.

Learn more about SAP's partner network:
Microsoft's strong midmarket channel thwarts Oracle, SAP

SAP addresses midmarket challenges

SAP's acquisitions of Virsa, Lighthammer, and others are part of the reasons this SAP-positive perception is being shopped all over Silicon Valley: I have trouble finding a software exec who doesn't dream of starting out on the SAP price list as a partner like one of the above companies, wracking up some serious sales, and then being bought out at a nice multiplier once the SAP partnership has been able to bolster the partner's overall evaluation. It's important to note that there is no such a similar buzz around partnering with Oracle.

The momentum behind SAP's efforts is already beginning to pay off – hence the fait accompli nature of SAP's partnership efforts. More and more vendors are flaunting their SAP partner status, and customers are responding. Oracle's lack of a similar buzz has obviously not hurt its sales, but partner momentum takes a little time to build. This time next year – baring some major effort by Oracle to build a similar buzz – SAP's partner network could prove to be a formidable competitive weapon indeed.

Joshua Greenbaum is a market research analyst and consultant at Enterprise Applications Consulting. He has more than 15 years of experience in the industry as a computer programmer, systems analyst, author, and consultant. Prior to starting his own firm, Enterprise Applications Consulting, he was the founding director of the Packaged Software Strategies Service for Hurwitz Group, which focused on technology, infrastructure and business issues in the enterprise applications market.

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