More jobs, more revenue.
If you’re in the business of technology consulting, software development or solutions integration, you have to like the sound of that forecast — especially now when businesses everywhere worry about their future.
Based on what they have experienced of late, strategically positioned tech companies are optimistic. Consider a forthcoming study from a leading U.S. trade association scheduled to be released in November 2020. The study finds that one in four partners enjoyed an unexpected sales boost after the global pandemic set in.
Another study released in mid-October 2020 by IDC should give SAP partners, in particular, a reason for confidence. The study, “Partner Opportunity in a Changing World,” anticipates that the SAP partner ecosystem will grow into a $260 billion market by 2024, up from $141 billion today. Employment within the ecosystem, meantime, is expected to increase by 600,000 to 1.6 million professionals during this time. (More on the study below.)
Several factors are driving this growth in high tech. This includes the global pandemic itself, which fueled a summer-long jump in the sales of PCs, monitors and enterprise software to displaced workers and their employers who rushed to set up home offices after the pandemic hit. In August 2020, HP Inc. CEO Enrique Lores told CNBC, “We have never shipped so many PCs.”
Then there’s digital transformation. Rather than slow momentum, COVID-19 triggered an acceleration in digital transformation projects, several studies find. In May 2020, for example, business consultant BDO published a report that concluded “it’s go digital or go dark” for many organizations.
“With rare exception, operating digitally is the only way to stay in business through mandated shutdowns and restricted activity,” BDO said.
Similarly, a study published in May 2020 by Wind River found that COVID-19 is influencing the specific technologies within end customer organizations that are attracting increased interest. Not surprisingly, they are 5G, containers and cloud innovations.
This brings us back to SAP.
“As the pandemic continues to impact the global economy, I see business opportunities,” said SAP Chief Partner Officer Karl Fahrbach. Speaking on a “What’s Next” business insights seminar for SAP partners in mid-October 2020, Fahrbach said there will plenty of new business for the 22,000 members of the SAP ecosystem.
IDC’s aforementioned study, which was sponsored by SAP, backs up Fahrbach’s belief.
Of the 600,000 new jobs forecasted to be created within the SAP ecosystem, 280,000 are expected to be high-wage consultant positions. Between now and 2024, digital transformation projects are expected to create as many as 1 billion billable hours for these and other SAP experts.
Growing interest in cloud technology, of course, will drive much of the new business. Of the more than $300 billion in net-new revenue expected to be generated through 2024 within the SAP ecosystem, 68% is expected to be driven by cloud investments.
These investments are helping customers of all size and ilk embrace digital innovation that only the largest of organizations had the manpower and money to buy a mere few years ago. This broadening of the market for SAP technology is made possible by the members of the SAP ecosystem, which collectively are expected to generate $5 in SAP-related revenue for every $1 that SAP itself creates. (This is roughly on par with other elite tech giants including Salesforce.)
As the number and scope of SAP opportunities increases, so do the capabilities of SAP partners. Today, 60% or more of an SAP partner’s revenue today comes from services that it creates on top of the SAP platform. In many instances, these services amount to partner-generated intellectual property, according to Steve White, program vice president of channels and alliances at IDC. Effectively, SAP’s best partners are creating a complete, finished solution for customers, said White.
Partners are also helping customers manage their way through what IDC calls “the five stages to enterprise recovery.” These start with the pandemic, economic slowdown and feared recession, and then finish with a return to growth and finally the next “normal.” During these stages, organizations often take specific measures to cushion the blow from COVID-19. These include drafting plans for business continuity, cost optimization, business resiliency, targeted investments and, finally, future enterprise initiatives.
SAP has a number of programs and strategies designed to help partners assist customers through these uncertain times. Several were showcased during the October webinar. This includes SAP LACE, which is short for the land, adopt, consume and expand framework.
Within the LACE framework are several initiatives and platforms for partners, including Drive2Deliver, packaged partner solutions, role-based, integrated Learning Journeys, as well as a shared partner demo environment and the Learning Hub. (For more on these and other programs, visit SAP PartnerEdge.)
Customers do not want to spend endless hours upgrading or integrating systems; instead, they want to quickly wrap projects and get the utility out of their software investments so they can better compete in their respective markets, says Hans Georg Uebe, global head of ecosystem delivery success for the Global Partner Organization at SAP.
“Partners must, in turn, think in terms of continuous innovation and improvements,” he says.