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May 16, 2022
Rise with SAP and the cloud-first S/4 HANA platform have swiftly transformed how SAP engages with its customers and partners. During this week’s SAP Sapphire conference in Orlando, the company’s leaders demonstrated just how rapidly those changes have taken hold.
Released early last year, Rise with SAP consists of what the company describes as transformation-as-a-service business solutions. Essentially, Rise consists of SAP’s ERP and line of business applications that are delivered as managed SaaS solutions by partners. Underneath, Rise offerings are hosted in the cloud-based S/4 HANA platform, and are available in AWS, Microsoft Azure and Google Cloud.
SAP’s Jason Schaps
SAP said more than 2,000 customers have deployed Rise solutions and that 60% are net-new SAP customers since its release. Currently, 900 partners are certified to offer Rise with SAP, according to the company’s head of cloud Jason Schaps. Rise is also attractive to partners and customers because it natively integrates with SAP’s Business Technology Platform (BTP), Schaps emphasized. While SAP has offered BTP for some time, it now supports hybrid and native cloud support with expanded features.
BTP lets partners more easily integrate legacy SAP and non-SAP solutions to Rise, Schaps explained.
“We have 54,000 SAP workloads deployed in the SAP cloud today,” Schaps told Channel Futures. “That’s more than any single global provider or hosting provider.”
SAP has been promoting various cloud models for several years. But the pace at which partners were migrating customers from on-premises SAP deployments lagged industry norms. Investors had also signaled they wanted SAP to step up the transition. CEO Christian Klein lowered the gauntlet in October 2020 when he said SAP was immediately accelerating the shift. That set the stage for the launch of Rise with SAP a few months later.
Rise with SAP was designed to allow quick deployment for customers looking to modernize their operations and supply chains. Equally, SAP emphasized making it attractive to partners, giving them the opportunity to extend their own IP, company officials emphasized. SAP also took the long-needed step of revamping its compensation its salesforce and partners. The new plan, which took effect in January, steered everyone to the cloud offerings.
SAP’s Karl Fahrbach
Until last year, SAP’s internal salesforce was compensated equally for selling on-premises or cloud solutions. Now they’re incentivized only to sell cloud offerings, according to chief partner officer Karl Fahrbach.
“We were basically incentivizing our internal salespeople in selling on-premises and clouds,” Fahrbach told Channel Futures. “So, they both counted to the quota retirement. Now it’s only cloud, so our salespeople don’t get compensated for on-premises.”
Likewise, SAP shifted its partner incentives to those deploying cloud solutions.
“At the beginning of the year, we said all of the business development funds, marketing development funds and all of the commissions that we pay are going to be only for cloud,” Fahrbach said. The move is working, he added. “Compensation drives behavior,” he said.
Another big change was the launch of the SAP PartnerEdge Cloud Choice, flex model last summer, which replaced its prior cloud compensation program. Fahrbach said it is a co-sell program in which the partner sells the solutions on SAP’s paper, and the revenues are shared. Designed to give more flexibility, SAP split the customer lifecycle in two stages: pre-sales and post-deployment customer management and engagement. The way it works is partners receive 10% commissions in total contract value (TCV) for initial deals, renewals and add-ons. The other option, which SAP calls “Adopt & Operate,” also provides 10% annual contract value (ACV), paid quarterly based on customer engagement.
Fahrbach said the flex co-sell model already accounts for roughly 70% of SAP’s indirect revenue.
“It’s catching on very, very quickly,” he said. “I feel that the alignment has been never better with our partners. They are selling Rise. They are delivering transformational services around Rise as well.”
SAP officials also showcased key technology alliance partners that were among the earliest Rise and SAP S/4 HANA customers. Among those that have transitioned are its first two “premium” Rise with SAP partners, Accenture and IBM. Other key partners that have adopted the new SAP cloud offerings include AMD, Google, IBM, Lenovo and Microsoft. As Premium partners, Accenture and IBM are the first that can offer Rise with SAP as “Technology Managed Services (TMS)” delivered by SAP.
The premium supplier designation means that Accenture and IBM will deliver Rise with SAP on its behalf, according to Fahrbach.
“They are sitting behind us, and they really take that task, or those technical management services for the Rise application,” he said.
IBM became the first premium partner earlier this year. An expansion to that alliance announced this week adds the option of running Rise with SAP on IBM Power on Red Hat Enterprise Linux on IBM Cloud.
Fahrbach said SAP will be announcing other premium partners, although he didn’t have an exact number.
Jeffrey Schwartz has covered the IT industry for nearly three decades, most recently as editor-in-chief of Redmond magazine and executive editor of Redmond Channel Partner. Prior to that, he held various editing and writing roles at CommunicationsWeek, InternetWeek and VARBusiness (now CRN) magazines, among other publications.
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