New SAP Channel Chief Readying New Partner Business Models

Rodolpho Cardenuto would like to see SAP's channel partners involved in 100 percent of the software company's customer interactions.

"My mentality is very pro-partner," said Cardenuto, who was named SAP's global channel chief earlier this month. "I want the partners to touch 100 percent of our business. Our customers need them," he said in an exclusive interview with CRN on the eve of SAP's Sapphire Now conference in Orlando, Fla., for customers and partners.

In the wide-ranging interview Cardenuto said the company's channel strategy is being fine-tuned around two business models: one a more traditional reseller model for partners who sell the company's on-premise and cloud applications, and the other for solution providers who build solutions around the vendor's flagship HANA platform.

Cardenuto also said the ultimate role of the new Global Partner Operations organization, which consolidates SAP's channel operations in one entity reporting to CEO Bill McDermott, is to support SAP's Global Customer Operations. "Because the GCO is focused on the customer, supporting GCO success is ultimately supporting our customers' success," he said.

SAP has been undergoing some extensive management changes in recent weeks, including the unexpected departure of Vishal Sikka, who oversaw development of the HANA in-memory database, and the elevation of GCO president Robert Enslin to SAP's Executive Board.

Several partners noted that corporate restructurings seem to be a frequent occurrence for SAP. "The one thing we would love to see out of SAP is some continuity. It seems like they're doing a reorg every six months," said Karen Mills, executive vice president at Idhasoft, a Santa Ana Calif.-based solution provider and SAP channel partner.

For partners, the most significant changes were the creation of the GPO and the appointment of Cardenuto to run it.

The GPO brings under one umbrella SAP's existing Ecosystems and Channels team, its OEM business, the SAP Business One application set for small businesses, and the company's other strategic partnerships. Most significantly, while channel operations were previously under the company's sales executives, the GPO reports directly to McDermott, giving the channel "a seat at the CEO table," company executives point out.

Cardenuto served as president of SAP Americas starting in January 2013. He joined SAP in 2008 as president of SAP's Latin America and Caribbean operations. Prior to joining SAP he worked at other IT companies for 25 years, including 15 years at Hewlett-Packard in a number of sales and SME management jobs.

Cardenuto said he's spent a good part of the past three weeks "getting my arms around the leadership team. Understanding what they are doing. And understanding what kind of synergies we can have once we consolidate the [channel] organization. We're putting together a single frame of governance for them so they can work together and leverage this new GPO organization."

Sapphire Now will be Cardenuto's first opportunity to meet some of the company's channel management team.

It will also be his first major forum for meeting with SAP channel partners, although he said he has been meeting and speaking with partners every day since assuming his new position. "They love the idea of the GPO," he said. "They love the idea of having an organization that's focused on the partners and that's working with them. [And] they love the idea of elevating the partner organization to the level of the CEO."

Cardenuto frequently met with partners when he was president of SAP Americas, as well as before when he managed Latin America for the company. But he acknowledged that in his new job he's seeing the channel from a different perspective.

Sapphire Now attendees can expect to hear a great deal about SAP's cloud computing offerings and HANA – the company's mantra is now "the cloud computing company powered by SAP HANA."

One of the GPO's missions, Cardenuto said, is working with channel partners to develop HANA as a broad cloud computing platform.

"We are becoming a very, very significant cloud player in the market. And a very profitable cloud player in the market," he said. Lining up the company's resources and those of its channel partners to develop HANA is both "a challenge and an opportunity" for SAP and its partners.

"We have a very strong, very solid partner ecosystem, from VARs, to systems integrators, to technology partners," he said. Given that many have developed applications and services on other SAP systems, such as its SAP Business Suite flagship line of ERP applications, he's confident partners can negotiate another platform transition.

"Partners look for opportunities in the market," Cardenuto said. "They understand what the market is going through, they understand the cloud, they understand that HANA is the next generation of our database and the platform for future applications. It's about business transformation."

Vision33, an SAP partner based in Irvine, Calif, does indeed understand. The company works with SAP's BusinessOne software for on-premise and cloud deployments and has been developing internal expertise around HANA. "We know that HANA is the future platform for SAP," said Alex Rooney, Vision33 vice president.

And partners must help their customers simplify the complex technology stack that many are wrestling with, he said, another theme that will be prevalent at Sapphire Now.

As SAP evolved in recent years to rely more heavily on the channel for sales, rather than its historical reliance on direct sales, the company set a goal of the channel accounting for 40 percent of new sales. That goal was largely met in the last year.

But Cardenuto said that metric has become less meaningful as SAP sells more software on a cloud and subscription basis. "We set this metric based on our on-premise business and license business," he said. "If we go to subscription, if we go to cloud, if we go to different business models, this metric is not necessarily the best one to really indicate the partner contribution. We have to review our concepts."

And that leads to Cardenuto's dream of 100 percent partner involvement. "I told my team I want 100 percent," he said, whether it's a reseller or systems integrator, cloud service provider, consultant, OEM or ISV partner. "I want the partners to be a part of 100 percent of what we do."

PUBLISHED MAY 30, 2014