In an exclusive interview with CRN India, Nitish Agrawal, Chief Partner Officer, SAP, shares the pivotal role of channel partners in SAP’s growth journey within the dynamic Indian market. With over 14 years of experience at SAP, Nitish provides insights into the evolving landscape, emphasising the symbiotic relationship between SAP and its extensive partner ecosystem. The discussion touches upon SAP’s cloud transformation journey, the unique strengths of the Indian ecosystem, and strategic initiatives aimed at fostering partner growth and competency.
Can you provide a brief overview of your channel partner business in India and their contribution to the revenue perspective in terms of percentage?
The journey of SAP in India spanning 27 years, soon to mark three decades, has been profoundly shaped by the ecosystem. In my 13 months in this role, and my 14 years with SAP, the ecosystem’s pivotal role in our growth journey has been unmistakable. The vibrancy and strength of our ecosystem, particularly in the last three years, amid the challenges like the pandemic, underscore its significance.
Our cloud transformation story in India, driven at scale, owes much to our ecosystem’s support, a feat that I’d describe as unprecedented. Consider some statistics: we serve 15,000 customers today, many of whom have migrated to the cloud. Moreover, we’ve expanded our market by onboarding new customers who were previously unacquainted with SAP. An impressive 85% of our customers are now served by our partners, emblematic of our partner-led approach.
While we don’t divulge revenue specifics at the India level, I can attest to the robust growth of our channel-led business, a significant portion of our overall operations. India’s contribution to this growth is particularly noteworthy, underscoring its pivotal role in SAP’s global strategy. The substantial contribution of our ecosystem, especially our channel partners, to our cloud business in India stands as one of the highest across SAP’s global landscape.
What are the key differentiators that have worked for you in fostering a channel-strong culture within your organisation and effectively engaging partners in your growth journey, especially in comparison to competitors in the market?
You really need to consider the broader landscape of the country. Any company or organisation in India can’t isolate itself from the significant trends shaping the nation, which are largely favourable. India boasts numerous positive indicators, such as being on track to become the third-largest economy, having a youthful population, and aiming to achieve a $1 trillion digital economy by 2026. This paints a picture of an aspirational India, and therein lies the differentiator. The key to a vibrant ecosystem lies in its ability to swiftly adapt and transform itself to meet evolving demands before addressing customer needs. The Indian ecosystem has excelled in this aspect, transitioning from the legacy world of on-premises solutions to embracing and implementing cloud technologies, demonstrating agility and adaptability.
I also take pride in SAP’s role in enabling this ecosystem. Over the past three years, we’ve made significant investments in people and resources to equip our partner ecosystem with the necessary skills to meet customer expectations. To summarise, India’s economic backdrop, coupled with a deep understanding of opportunities and an aspirational spirit, sets the stage for growth. SAP’s story extends beyond large enterprises and PSUs; it’s about becoming a partner-led company, expanding into new markets and cities across India. In 2021, we engaged customers from 57 cities, which grew to 87 in 2022 and 132 in 2023. This expansion into tier two and tier three cities underscores our commitment to understanding local requirements and leveraging our partner network to drive digital transformation nationwide. These factors—economic momentum, strategic intent, and growth prospects in every corner of India—highlight the unique strengths of the Indian ecosystem and its ability to deliver results.
Do you observe a heightened interest among partners, particularly in India, towards economic aspects, given the government’s emphasis on digital initiatives and the increasing discussion around AI? Would you say Indian partners have an edge over their peers in other regions in this market?
Recently, I had the opportunity to host a delegation of 15 partner organisations from the Middle East and Europe, who visited India on a study tour to explore the operational dynamics and customer behaviours within our ecosystem. I must say, they were truly captivated and enthusiastic about the business prospects here. While I won’t draw direct comparisons, I can affirm that they gleaned valuable insights during their visit. As an Indian, I take immense pride in the way we approach business opportunities and meet customer needs at SAP.
Being part of the broader SAP ecosystem, I observe a distinct customer-centric ethos and a strong sense of accountability within India. Our ecosystem, comprising SAP and our partners, is well-equipped with the right ingredients for success. Every partner I collaborate with exudes entrepreneurial spirit, driven by a desire to enhance business and positively impact customers’ lives. We have inspiring stories of customers leveraging our solutions, ranging from small businesses with turnovers as modest as 100 crores to industry giants. Making a tangible difference in the growth journey of these aspiring businesses is the true essence of our success story in India.
Our partners play a pivotal role in our growth trajectory, particularly in the net new segment. They have embraced this challenge with gusto, leading the charge in initiatives like “Grow with SAP” and our Public Cloud offerings. Their proactive engagement has been instrumental in driving adoption and expanding our footprint across diverse regions in India. In fact, recognising the immense potential, I am excited to lead a dedicated initiative this year focused on fostering Public Cloud adoption across various states and union territories.
Beyond our core business activities, there is immense untapped potential for growth, and our partners remain integral to realising these opportunities.
What specific efforts are being directed towards partners who are seen more as a traditional channel players involved into box selling rather grasping the concept of cloud?
I think you said it right. It’s indeed all about shifting mindsets and demonstrating what’s achievable. This holds true for both our customers and the emerging young partners. Speaking of customers, the mobile and internet revolution has truly reshaped how we perceive the world, making it feel smaller and more interconnected. Even small-scale suppliers in India now have a profound understanding of global dynamics, becoming more socially and economically aware. This, coupled with the influx of young talent into SMEs, is pivotal in fostering a mindset that acknowledges the need for a robust platform to facilitate business growth, perhaps by leaps and bounds.
Our ongoing investment in cultivating this mindset is evident across various channels. Take, for instance, the success stories of customers who embraced SAP solutions years ago. The proof of their success serves as a compelling narrative, especially within their own communities. Witnessing firsthand the transformational impact of SAP solutions on peers fuels a sense of possibility and drive among these young customers.
Turning to our partners, the level of investment is substantial, and we take great pride in nurturing a skilled workforce within the ecosystem. Today, partners have the opportunity to certify their resources across a spectrum of SAP solutions. We continuously roll out enablement programs to further empower our partners. Just recently, we introduced an enticing initiative incentivising partners to onboard and upskill young talent from colleges, addressing the looming skill gap in the rapidly evolving SAP landscape.
Recognising the broader skill gap prevailing in India, we’ve adopted a systematic approach to address it. Through avenues like CSR initiatives and university partnerships, we’re actively bridging this gap. Leveraging our extensive partner network, we’re committed to nurturing the next wave of SAP talent, potentially creating a million-strong SAP skill base.
Have you given any name to this program?
No, we haven’t assigned an official name to it, but our university alliances program has always been integral to our efforts. What we’ve executed quite effectively is connecting students who pass the SAP exams with potential employers. We’ve established partnerships with various entities, either individually or in collaboration, who consider SAP certification as a significant factor when hiring talent. Consequently, these young graduates are finding opportunities with our partner organisations. It’s truly a rewarding journey for these recent college grads who have obtained SAP certification, knowing that the ecosystem is eager to welcome them. In this way, we’re bridging the gap and facilitating the entry of fresh talent into the workforce in India. To support this endeavour, we’re implementing several initiatives, both as part of our corporate social responsibility (CSR) efforts and within the framework of our university alliances program.
Do you believe it’s beneficial, particularly for smaller organisations facing challenges in talent retention and hiring, to engage more with born-in-cloud partner organisations, especially in tier two and three towns, where legacy systems may not be a concern?
It’s quite fascinating to observe how even our long-standing partners of 30 years are adapting to the shifting dynamics of cloud economics. Many are either adjusting their mindsets or establishing entirely new teams dedicated to cloud-native approaches. I wholeheartedly echo your sentiment that viewing these partners, or perhaps a division within their organisation, through a cloud-native lens is crucial. It’s about embracing a fit-to-standard mindset, emphasising a streamlined core strategy over excessive customisation, and engaging customers in conversations centred around industry best practices for transformation.
When it comes to recruiting new partners, my team and I approach it with a profound sense of responsibility. Once a partner becomes part of the ecosystem, our commitment is to their success. We spare no effort in supporting them to thrive, which ultimately translates to achieving consistent revenue streams. Several key factors guide our selection process. Firstly, a solid grasp of SAP’s solutions and strategies is essential, and we’re always ready to provide further guidance in this regard. Secondly, partners must delineate their market play, whether by geography, industry, or domain expertise, and we offer assistance through our business development programs accordingly. Lastly, regardless of company size, what matters most is the hunger and drive to make a tangible impact.
We take pride in nurturing our partners through every stage of their journey within the ecosystem. It’s noteworthy that a significant portion of our participating partners in each quarterly digitised customer journey are newcomers. This underscores our commitment to fairness and meritocracy, ensuring that every partner, irrespective of their size or tenure, is treated equitably. Our team and processes are robust, as one would expect from SAP, ensuring a level playing field for all partners to deliver implementation expertise to end customers.
How many active partners does your organisation currently have?
So, when considering partnerships, it’s essential to understand them from multiple dimensions. We have our ‘Sell Partners’, who are our typical channel partners, and our ‘Services Partners’, who focus on implementation. What we observe today is that the ‘Sell and Services’ partner ecosystem is nearly identical. Many partners are interested in both selling and providing services, and vice versa. However, the service ecosystem tends to be slightly larger.
Additionally, we have a vast open ecosystem consisting of partners who develop various IPs using our business technology, including ISVs. These partners contribute to our SAP store, our marketplace where ISVs list their solutions. We’ve established robust commercial models to support ISVs in selling their solutions not only to customers in India but globally as well. This extensive reach empowers even our smallest partners. If they develop a sellable IP, they can market it in places like Mexico, Germany, or India, leading to numerous success stories. So, overall, our partnership landscape is quite dynamic and promising.
When assessing the selling ecosystem, we’re currently engaged with approximately 250 partners in India who play an active role in our daily operations. These partners are deeply involved in creating opportunities, engaging with customers, finalising deals, and subsequently implementing solutions. It’s worth noting that we’re quite discerning when it comes to further expansion, and this is primarily due to our commitment to maintaining accountability within the ecosystem. Collaboration with our team is integral to ensuring that each partner meets their performance objectives in a collaborative fashion.
How do you address the challenge of manageability, particularly when your operations span various locations across the country?
Ensuring the success of each entity under our management is crucial, as they must thrive as viable businesses. To achieve this, we must equip them with the tools and support necessary to foster sustainability. Therefore, I view this number as highly promising, indicating a solid foundation from which we can propel ourselves towards our growth targets in the coming years.
What new opportunities or growth areas do you foresee for partners aligning with SAP, and how do you plan to enhance their competencies and capabilities in those areas?
Absolutely, the growth trajectory with SAP is truly remarkable. The market reception to our cloud-native ERP solution has been overwhelmingly positive, fulfilling a longstanding need in the market. We’re thrilled to announce that nearly 100 customers have already gone live with our solution in less than one and a half years since its launch, with more go-lives happening daily. This expansion extends beyond our current install base, as we aim to digitise more MSMEs and engage with the burgeoning startup community. These segments hold immense strategic importance for us in India, given the promising potential of MSMEs and the pride in supporting over 40 out of India’s 100 unicorns with our solutions. Our HXM product, SuccessFactors, is also witnessing significant adoption among digital natives, underscoring their importance as a key consumer segment.
Another important area of focus is our approach to business AI. While AI remains a hot topic across industries, our focus at SAP has been distinctly business-oriented, prioritising seamless integration and user experience. We’re embedding AI scenarios directly within our core solutions, ensuring that end-users can leverage AI capabilities effortlessly to enhance efficiency and productivity in their workflows. Also, our GenAI Hub platform presents a wealth of opportunities for partners to develop industry-specific and process-specific AI use cases, leveraging their proximity to customers and insights into their unique challenges.
Lastly, sustainability has emerged as a critical aspect of digital solutions, with SAP now offering a mature portfolio for recording, reporting, and acting on sustainability-related data, including carbon accounting. As we advance in this area, the ecosystem will play a pivotal role in amplifying the impact of our sustainability initiatives, underscoring the collaborative nature of our approach to driving positive change.
Can we expect more partnerships like the one with Deloitte for GenAI, focusing on automation solutions?
Absolutely. GenAI or business AI, as we call it, represents an area where we’re witnessing the emergence of new realms of partnership. While conventional models persist, we’re exploring innovative approaches with our partners. Notably, all the hyperscalers are actively engaging with us in this domain. Partnerships with industry leaders like Deloitte, PwC, Accenture, and IBM are yielding numerous new assets, ranging from large-scale initiatives to more niche solutions.
Our collaborative efforts result in packaged offerings, empowered by AI or other cutting-edge technologies, with clearly defined scopes of implementation. These packaged solutions are gaining significant traction in the market, driving excitement for the future. What’s particularly thrilling is the unique advantage offered by the Indian ecosystem. From here, we can serve both Indian and global customers effectively.
It’s worth noting that a substantial portion of global companies have established Global Capability Centers (GCCs) in India. Leveraging this, we’re fostering cross-team collaboration between global giants like Shells and Nestles and our indigenous companies. This exchange of talent ensures the adoption of best practices globally, enhancing innovation and competitiveness locally.
In essence, India serves as a significant talent hub for the world, boasting a diverse pool of talent from both global and Indian companies. This rich talent landscape, combined with our strategic partnership with SAP, positions us to excel on the global stage. Take, for example, our second-largest labs outside Germany, located in Bangalore, Pune, and Gurgaon. Here, we’re actively involved in developing a comprehensive portfolio of solutions, some of which are manufactured right here in India.
Having such resources readily accessible in close proximity underscores the unparalleled advantages offered by the Indian geography. With access to top-tier talent and robust support from SAP, there’s virtually no limit to what we can achieve here in India.
Has your partner program undergone modifications to align with changing market trends and meet the evolving expectations of customers and partners?
I believe it has, and I would argue for the better. Now, we’re increasingly steering the process towards being more competency-driven and transparent. For instance, prospective or current customers now have the ability to access the partner competency framework. This framework offers insights into the competencies of the partner they’re considering, such as the number of implementations completed and the size of their consultant pool. This democratisation of information empowers customers to assess the skill sets and experiences of every partner accurately. They no longer have to rely solely on hearsay; instead, they can access regularly updated data at their convenience. This digitisation and transparency represent significant shifts we’ve implemented for customer evaluation.
Also, our focus extends to mapping out the partner’s journey towards achieving their strategic objectives and meeting SAP’s expectations. These efforts have substantially evolved our partner program, particularly in the realm of cloud computing.
What directions have you set for your partners for 2024 and beyond, particularly in terms of immediate focus areas?
Our business strategy revolves around several key areas. Firstly, we maintain a laser focus on the mid-market segment, recognising it as a significant engine of growth for us. A substantial portion, approximately 75-80%, of our ecosystem operates within this space, with a notable emphasis on partnering. Indeed, partnerships are instrumental in driving a considerable portion, upwards of 90%, of our business within the mid-market. This steadfast commitment to the mid-market remains at the core of our operations.
Our attention also extends to the digital transformation of government departments and public sector undertakings (PSUs). Over the current year and the next two, we anticipate witnessing substantial transformations in this domain, with prominent roles played by key partners. Simultaneously, large enterprises continue to hold strategic importance for us, engaging us in ongoing discussions concerning their digital journeys.
We view the digital native space as a strategic growth area, building upon the foundation laid over the past three years. Our intention is to scale this segment of our business, an endeavour that is reliant on active participation from our partner ecosystem. These three broad areas collectively represent significant business potential, with our partners demonstrating a high degree of readiness and confidence in meeting the evolving needs of Indian customers.
