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Will SAP direct make any difference to the industry?
Sunday 11 November 2007, by : Alex Malouf
The announcement by industry giant SAP that they’d be entering the Middle East direct made headlines not only locally but around the world. Long deemed to be outside of the MENA region due to its partnership with SAP Arabia, the ERP heavyweight was long rumoured to be looking to come direct into the Middle East market after a fractious relationship with the latter.
However, after thinking it all through will SAP coming direct make that much difference to the local market? Despite having some very large customers, including the largest non-defense sites in the world, SAP doesn’t have as large a customer base as Oracle or even Baan did in the late 1990s.
In fact, of the twenty or so Saudi customers SAP has in Saudi most have – according to sources in the channel – a direct relationship with Germany-based SAP AG. SAP Arabia may have collected the licensing fees or a percentage of them, but SAP AG owned the relationship.
So what will change? Aside from the significant amount of money that SAP AG most likely paid to come in direct and acquire SAP Arabia’s software license and maintenance businesses, there will be the investment in people on the ground. SAP has committed to opening up a subsidiary in Saudi Arabia; a vital step if SAP is going to grow in the largest market in the Middle East and one which should put a close to SAP Arabia’s odd decision to have its main office not in Saudi but in Dubai.
What will make the difference to both the channel and end users is the attention. End users locally have been crying out for resources and training. Every job website in the region has ads for SAP consultants, analysts, engineers and the rest. By being locally present, SAP AG will have the resources, the money, and the inclination to provide the necessary push towards channel development. The irony is that the myth that SAP is more expensive than Oracle is no longer true in many cases. With end users and channels wanting a choice, SAP AG’s belated decision to go local may be warmly received. Let’s hope it’s not a case of too little, too late.
Sunday 11 November 2007, by : Alex Malouf
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 Aramco already has a direct relationship with SAP |
However, after thinking it all through will SAP coming direct make that much difference to the local market? Despite having some very large customers, including the largest non-defense sites in the world, SAP doesn’t have as large a customer base as Oracle or even Baan did in the late 1990s.
In fact, of the twenty or so Saudi customers SAP has in Saudi most have – according to sources in the channel – a direct relationship with Germany-based SAP AG. SAP Arabia may have collected the licensing fees or a percentage of them, but SAP AG owned the relationship.
So what will change? Aside from the significant amount of money that SAP AG most likely paid to come in direct and acquire SAP Arabia’s software license and maintenance businesses, there will be the investment in people on the ground. SAP has committed to opening up a subsidiary in Saudi Arabia; a vital step if SAP is going to grow in the largest market in the Middle East and one which should put a close to SAP Arabia’s odd decision to have its main office not in Saudi but in Dubai.
What will make the difference to both the channel and end users is the attention. End users locally have been crying out for resources and training. Every job website in the region has ads for SAP consultants, analysts, engineers and the rest. By being locally present, SAP AG will have the resources, the money, and the inclination to provide the necessary push towards channel development. The irony is that the myth that SAP is more expensive than Oracle is no longer true in many cases. With end users and channels wanting a choice, SAP AG’s belated decision to go local may be warmly received. Let’s hope it’s not a case of too little, too late.
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