Where is the Revenue Opportunity for Partners?
As a kid, I’d often daydream out the classroom window, and I remember my teachers would sternly say to me, “Get your head out of the clouds!” Little did they know at the time how much the cloud would impact our future.
I’m still in awe of how quickly business models have reconstructed over the last decade. I don’t have a crystal ball, but what I do have is experience and expert colleagues–and everything and everybody is pointing toward a bright future for partners, with a lot of opportunities in a transforming world.
A recent IDC study outlines the opportunities for partners and what we can expect to see on the horizon. Digital transformation is one of the biggest drivers for companies both large and small across industries. IDC expects that by 2020 at least 55% of organizations will be digitally determined, transforming markets and reimagining the future through new business models and digitally enabled products and services.
By now, most partners are engaged in developing or executing a digital strategy–only around 10% have not started yet. About 35% are in the late stage of digital maturity, with 16% being fully integrated into the business and 19% done and starting to produce results.
According to IDC, “The digitally savvy are outstripping their peers.” SAP partners with a fully integrated digital strategy experienced an average of 43% revenue growth last year, compared to 22% for the rest of SAP partners.
The future looks even more promising by 2022. It’s estimated that cloud, analytics and social will grow to $764 billion–a 14.2% compound annual growth rate, with Innovation Accelerators ICT (AI, robotics, IoT, etc.) growing to $1.8 trillion–a 17.5% compound annual growth rate, and “in 2022, enterprises worldwide will spend $2.0 trillion on technology and related services to implement and manage Digital Transformation (DX) initiatives.”
And there’s more. By 2023, partners will drive $4.84 for every $1 of SAP software; for cloud software, it’s $6.48. Nearly 60% of net-new partner opportunity will be built around SAP cloud across the globe. Those partners that develop on SAP Cloud will grow the fastest–growing at 23.4% CAGR through 2023. This growth rate is 2.3x the rate of other partners. By 2024 the SAP partner opportunity will double. Over the next five years, the partner opportunity will grow to $202 billion.
Based on IDC research, the SAP cloud partner opportunity represents $53 billion captured by partners that lead with services, $42 billion by partners that lead with resale/integration, and $24 billion by partners that lead with software development.
I know I just threw a lot of numbers at you. The point of it all was that there is an enormous amount of opportunity and growth coming for both partners and SAP. And it’s coming soon. Like, in the next five years. Check out this recent news story for more details.
There has never been a more exciting time to be in the channel. Whether you partner with SAP or someone else, this will be your time to offer customers additional services, particularly additional cloud-based applications and cloud-based infrastructure. In fact, the resale of cloud software is currently among the fastest-growing revenue streams.
Do you want to drive value for customers through the digital transformation? You can learn more by visiting https://www.sap.com/partner.html for information on the SAP PartnerEdge program.
This guest blog is part of a Channel Futures sponsorship.