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Author's profile photo Finn Backer

Why should a SAP channel partner consider SAP’s industry cloud?

Within SAP I am responsible for the topic of industry cloud for channel partners.  I often get the question:  why should I as a SAP channel partner consider SAP’s industry cloud?  And how’?

My answer is: YES, you have to consider joining the SAP’s industry cloud strategy.  Based on my experiences discussing industry cloud with channel partners, I want to share this “elevator pitch” with you in this blog post..

Move to the cloud
You will probably not be surprised to hear that SAP is accelerating it’s move to the cloud.  Part of this acceleration is a new SAP solution strategy.   Cloud solutions are different from on premise solutions, so this make sense, right?   As part of this new SAP solution strategy,  new industry capabilities will be delivered as modular industry cloud solutions, and NOT in SAP S/4HANA itself.   “Keeping the core clean” is something you might have heard from SAP.   SAP’s Industry Cloud is exactly that!

Further, as strategy SAP has decided to NOT develop all the needed industry cloud solutions itself.  SAP will rely and collaborate with IP/solution partners to maintain a competitive solution portfolio.   And as a consequence, SAP’s own sales force is pitching these partner solutions to SAP’s own customers.  SAP account executives are being compensated when a sale is done, even though the partner solution is not on SAP price list.  In these cases, we talk about SAP store solutions.   As of January 2022, there are more than 80 partner developed industry cloud solutions, compared to 30+ SAP developed industry cloud solutions.  Senior SAP executives have stated that moving forward SAP envisions that 80% of industry cloud solutions will come from partners.

Personally, I think this makes a lot of sense:  in the cloud world comprehensive IT systems are more and more put together by web services delivered by various specialist vendors.  One can even say this is becoming “best practice”.  Also, this strategy helps SAP get into the platform game AND  leverage all the innovations and good ideas from the SAP partner eco system for the benefit of our customers.

Open standards
To ensure that all SAP’s industry cloud solutions work with SAP S/4HANA in a consistent manner, SAP has defined an “architecture and development guide for industry cloud solutions”.   This guide ensures that all partners and vendors develop solutions in the same way.    For example, using SAP Fiori as the user interface style & public cloud as deployment model .  SAP’s own development teams also have to comply to these guidelines when they develop new industry cloud solutions.

While SAP till now has proactively recruited specialist partners to develop industry cloud solutions (mainly for the large enterprise (LE) market space), SAP’s industry cloud is an open program.  Any partner following the development guidelines can get their solution approved as an official industry cloud solution.  I think this is a huge opportunity for channel partners with own industry related IP!

Channel partners need to re-evaluate their solution strategy
In conclusion: SAP has made some fundamental changes to it’s solution strategy, with big impact on  industry capabilities.  If you as a channel partner resell SAP solutions with an industry go-to-market approach (which basically is always the case….) you need to understand the new strategy and make up your mind of how to deal with it for your company.   Here are the two most likely considerations you should make:

1.Partners with important industry IP should consider to make adjustments and/or “uplift” their IP to  SAP’s industry cloud standards and guidlines.  Why? so you are ready for a future of cloud in the SAP world!   I also think there are huge benefits for you to market your solution as official approved SAP’s industry cloud solution.

2.In addition to resell SAP developed solutions, partners should consider to leverage partner developed industry cloud solutions for their prospects and customers.   Don’t wait for SAP to develop all needed industry capabilities!!!   It wont happen!

If you as a channel partner want to learn more details about this topic, I would recommend checking out this SAP blog post.

Below is the “hamburger” diagram of the SAP solution strategy.  SAP’s industry cloud strategy is clearly visible: the “intelligent suite” and the “industry cloud” boxes are clearly separate from each other, representing that they are different and separate (cloud) solutions, only working together via APIs.  Even within the industry cloud box, you can see the the various industry capabilities are separate boxes, representing different autonomous public cloud solutions,

Burger

Moving forward, I plan to release a blog post on the topic of SAP’s industry cloud for SAP channel partners every 2-3 weeks.  Feel free to follow my profile or the “industry cloud” tag.   You can find Q&A and post questions in the industry cloud community.

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