March 30, 2004

SAP is reaching "smaller businesses" via larger businesses

Software vendors are like sharks in an ocean. They get excited at the small of blood. Well - blood is the small-medium sized business market.

There's very small businesses that either do "shoe box" accounting, rely on a simple spreadsheet or millions use Intuit's Quickbooks or Peachtree, MYOB or other solutions.

However, there's larger small-medium sized businesses that need more robust solutions. They might spend thousands and not hundreds on their accounting solutions. They have complex accounting needs, inventory, fulfillment, warehousing, and other needs. Not to mention - integration with partners and more.

Icode, ACCPAC, Best Software, Microsoftand others all have solutions for these larger small businesses.

One method, that works to increase sales is building a sales force that can directly sell to these accounts. Direct sales is an option at times but a resale channel works best when reaching the SMB space. However, software vendors need to be on the continuous look out for other - more innovative sales solutions.

This SMB market is a tough market to crack. For large businesses - one sale might be worth hundreds of thousands to millions of dollars. It's a slower sales cycle, but the rewards are huge. For SMB's a vendor might have to sell to 10 accounts, putting more staff in the sales process to equal one Fortune 500 account sale, for example.

This is the market, LARGE businesses, that SAP is used to playing in.

However, over the past year and more, SAP and other businesses (Oracle - via Netledger) have continued to move from their large businesses accounts to SMB's.

One technique that apparently has worked for SAP is to reach smaller customers via its larger customer base.

1. Many smaller businesses have larger businesses as their customers. For example - Wal-Mart. It partners with hundreds of smaller businesses. The interesting thing is that often these larger businesses dictate certain types of technology practices to their smaller partners. But also, at times the SMB partner will seek the input of their larger business customer on tech issues

2. The second thing that's happening is that many larger companies have smaller units, subsidiaries or etc and encourage them to use a specific technology platform.

These two things are helping SAP gain traction for its Business One software.

SAP AG recently announced that its solutions for small and midsize businesses (SMBs) are gaining market traction as large companies in numerous industries seek the advantages of transparency, real-time reporting and business process integration with their subsidiaries, trading partners and suppliers. Companies around the world have recently entered agreements to deploy mySAP¬™ All-in-One or SAP¬Æ Business One solutions at operating affiliates across the globe, maximizing the return on their initial investment in SAP¬Æ solutions and reaping the benefits of SAP¬’s unique ability to integrate the entire business landscape of small, midsize and large companies.

Industry experts estimate that there is a significant percentage of small and midsize businesses that are affiliated with a parent group, while others engage with larger companies as customers, partners or suppliers. Affordable, easy-to-implement and effective business management tools, SAP solutions for SMBs integrate fully with the solutions of mySAPª Business Suite and other SAP solutions used by more than 21,600 SAP customers, enhancing reporting and information sharing, streamlining business operations and increasing efficiency between parent companies and their operating affiliates. This seamless integration is an increasing competitive advantage as businesses demand more transparency across their operating networks to meet new regulatory reporting requirements and seek enhanced collaboration and efficiency with their affiliates, partners and suppliers to achieve growth.

Check out this link to see a list of the dozens of business management software apps

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