SAP Pledges Referral Fee

SAP will offer eligible partners a one-time fee on new CRM on-demand services if they refer the business to the vendor, a company executive said.

Mike Sotnick, vice president of small and midsize enterprise at SAP America, also left the door open for more channel participation in the future.

Two weeks ago, the ERP giant unveiled a compensation-neutral sales model and said partners could play in accounts with up to $1 billion in revenue. The previous ceiling had been up to $200 million. “Comp-neutral” plans, which pay direct salespeople the same margin whether a sale flows direct or through partners, go a long way toward eliminating channel conflict that can—and usually does—dog enterprise software companies.

Just days after that announcement, SAP followed with news of its new CRM on-demand services, which would only be available from the Walldorf, Germany-based company.

Some characterized this as a two-steps-forward, one-step-back channel move. Sotnick filled in a little more detail: Partners referring customers to SAP’s pay-as-you-go CRM will get a one-time 10 percent referral fee on the total initial sale.“We felt compelled to get CRM on-demand out in the marketplace and were not going to hamstring the channel by giving them inadequately prepared training and solution guides to leverage it,” Sotnick told CRN.

SAP, like Oracle, segments its market, serving largest accounts directly and cordoning off small and midsize accounts for partners.

Sometimes, tiering works. Daniel Carr, CEO of Computer Decisions International, an SAP BusinessOne specialist in Farmington Hills, Mich., said he sees no conflict between the direct CRM services from SAP and his own midsize BusinessOne accounts.

Other partners with pre-existing relationships with large companies, however, often resent what they see as a marginalization of their enterprise role.

Carr said SAP’s decision to let partners attack bigger businesses could be beneficial. “We might be able to penetrate ecosystems of Fortune 1000 companies with a lot of subsidiary plants and offices,” Carr said.SAP’s move on compensation neutrality could ripple beyond its own backyard, or at least some partners fervently want it to. “I only hope Oracle pays attention to that,” said Scott Jenkins, CEO of The EBS Group, a Lenexa, Kan., Oracle e-business partner.

Oracle partners lament that vendor’s refusal to go to a comp-neutral model and cite examples of where it has cost them sales even in deals that they bring to the table.