Cloud-First Partner Model and what it means for you

SAP’s cloud-first partner model

13 Mar 2024 by Andrew Spicer

Recently, SAP announced some significant changes to its partner programme internationally that were lost in the Southern Hemisphere end of year rush but which have big implications for New Zealand SAP customers in 2024 especially in the key mid-market.

In essence, SAP is moving to a partner-centric sales and service model for its cloud based products, which will see SAP partners like Realtech become the go-to organisations for New Zealand businesses adopting or upgrading to enterprise resource planning (ERP) platforms like SAP S/4HANA Cloud.

This shift comes as no surprise to the Realtech team, with SAP long ago signalling the need for customers to migrate from ageing on-premises infrastructure to SAP’s more flexible, secure and feature-rich cloud platforms.

As SAP channel chief Karl Fahrbach told ARN in November, SAP is investing in partners that adopt a “cloud-first” mindset and “engagement model” focussed on customer transformation.

"It all comes down to creating customer value in the cloud. That is the starting point for all of us. Our partner program next year will evolve to drive accelerated cloud transformation and customer value along the entire customer value journey,” he said.

Shifting incentives

For SAP partners, the change ushers in some pretty profound changes that shake up the incentive schemes partners can take advantage of.

“Partners will be strongly impacted if they continue to transact on-premise products as the partner programme will only reward cloud-based motions moving forward,” SAP advised in November.

In 2024, SAP will stop issuing “value points” to partners selling on-premises products. Accumulating value points is the key way partners attain or maintain gold level partner status and associated benefits, so that will serve to quickly shift the behaviour of the partner ecosystem.

With mainstream maintenance for SAP ERP Central Component (ECC) scheduled to stop at the end of 2027, the changes to the partner programme changes will see all efforts in the SAP world aligned to get customers onto modern, cloud platforms.

At Realtech, we see this as a very positive move. While we still support many customers with on-premise versions of SAP, when it comes to sales and service, the vast majority of our business is in assisting with planning and implementation of products like SAP S/4HANA Cloud, which deliver tremendous value and return on investment.

As part of the changes, SAP has outlined simplified partner requirements, streamlined certification requirements and key metrics and milestones to ensure an optimal post-sales experience for the joint customers it shares with its partners.

What it means for SAP customers

For SAP customers who have on-premises infrastructure running SAP, existing arrangements with partners or directly with SAP will remain in place. Large enterprise customers may also continue to work directly with SAP. For small and medium enterprises, which make up the bulk of businesses in New Zealand, and which SAP is often highly suitable for, partners will form the frontline of sales and service for SAP cloud products.

Because SAP Cloud licensing and subscriptions are offered directly by SAP which also provides support for its cloud platforms, cloud customers will continue to deal with SAP alongside their relationship with an SAP partner.

Realtech is excited with this partner-first strategy, which we are already ready to take advantage of. We see this strategy as a great opportunity for Realtech to provide even more guidance and support, giving additional benefits to our existing and future customer.

We see ourselves as ideally placed to meet growing customer demand due to four key factors:

  • Our sole focus is on SAP: We don’t sell, support and consult on a wide range of software platforms and products. SAP is our core focus and the Realtech team has deep experience in designing, implementing, migrating and supporting SAP platforms.
  • Our boutique size: We are not a huge consultancy, but a tight-knit team of consultants and SAP experts. When you work with Realtech, you get to know the team and won’t be handed off to other consultants once the deal is done. You can always pick up the phone and call me directly on any issue, or just for a chat!
  • Our customer-first focus: Our focus always is on understanding the business requirements of our customers and helping them leverage SAP platforms to help them achieve them. We stay on the case until the project is completed to your satisfaction and pride ourselves on offering the best customer service and support in the New Zealand SAP partner ecosystem.
  • Our competitive pricing: We don’t have the big overheads of large consultancies. We run a lean operation and are sensitive to the tough economic climate, which is requiring every business to contain costs. We believe we offer incredible value for money and you certainly won’t experience any bill shock when working with Realtech.

So 2024 is shaping up to be an exciting year for SAP, its customers and for Realtech. We look forward to working with customers who are embarking or continuing their SAP journey.

If you’d like to discuss what the partner programme changes mean for your business, or explore what the SAP Cloud can do for your business, don’t hesitate to get in touch, I’m just a phone call away.