New Canadian director sees SAP as sales firm, not IT organization

Meet the new managing director of SAP Canada Bob Elliott. We did a live Google Hangouts on Air interview with Elliott and fielded questions from social media for him. You can watch the full interview video hear or scroll down to read the Q&A.

Earlier this month, Elliot replaced Mark Aboud at the software firm. Aboud is going to run SAP’s global sales division after six years of leading the Canadian subsidiary. Elliott is being promoted from his position of national vice president of sales, where he was responsible for SAP licence sales and overseeing leaders in various regional and vertical sector teams at SAP. He holds a bachelor of arts in economics from Western University. Elliott will be responsible for more than 2,300 employees in Canada.

Here’s how Elliott responded to my questions during the interview above. Answers have been edited for clarity and paraphrased in some cases.

Brian Jackson: Mark Aboud has been the managing director of SAP Canada for six years and now you’re taking the helm. What changes can we expect to see?

Bob Elliott: Mark and I joined SAP around the same time and I have been his right-hand man at the company. “He’s been grooming me to fill his big shoes.” So the change will be an evolutionary one rather than revolutionary. Also expect to see an increased focus on cloud-based software, the HANA platform, and big data.

BJ: You’re coming into this role from the sales side of the organization, having  been with the firm since 2007. How will that inform your approach as managing director?

BE: “SAP is at its heart a sales company. Everyone’s job is to sell software and deliver on that software to our customers.” Customers vote with their pocketbooks and if a particular product or service isn’t selling well, then it’s not meeting customer demand and something has to be done. SAP Canada has about 1,500 employees in development labs and we try to get these folks out in front of the customer whenever possible. A big priority is to put the development team closer to the customer. So teams are often spending time with customers out in the field. SAP has organized its development staff into agile teams of no more than 10 people each, so they can quickly react to customer feedback.

BJ: I attended your Sapphire conference back in January and there was a lot of focus on  shifting to software-as-a-service delivery model, especially with your recent acquisitions of SuccessFactors and Ariba. How do you see your role in pursuing that objective?

BE: The cloud thrust at SAP is being driven by customer demand, and it is becoming a cloud-first company. This makes for a tricky financial transition because the company used to depend on an up-front licence fee and then maintenance costs. “We don’t have those sort of lumpy upfront payments when the licence is done. We have to cross that chasm from less up-front licence fees to  more ongoing fees.” But this results in more predictable and consistent income for SAP and its shareholders in the end.

Data residency is also an issue SAP is looking at in Canada and it’s talking with some Canadian data centre providers. SAP will have a number of cloud offerings that it needs to support. It is also looking to expand its channel efforts on the cloud front by asking channel partners to complement SAP offerings with hosted services. There are currently about 8,000 SAP customers in Canada and most of them are below $1 million in revenue.

“We have a mature set of resellers that cover the ERP and analytics space on premises.” Would like to see those partners offering those products both on premises and in a hosted model. There’s also verticals like healthcare and higher education where SAP could use some more reseller support as it lacks direct coverage.

BJ: HANA was also a big theme at Sapphire of course. It’s been identified as your platform for all cloud services. How do you plan to communicate what this means for your Canadian clients?

BE: I’m eager to communicate early and often and at every opportunity about our new platform. “A lot of customers and partners still think of SAP as an IT company when that’s really a small part of my business.” This presents a big opportunity for enterprises to take advantage of big data and it also underpins every single solution for SAP whether its in the cloud or on-premises. We’re expecting to see the ERP Suite on HANA see double or triple digit growth as this will allow companies to run the software in real-time and immediately gain insights from it.

BJ: SAP is better known as an enterprise-level vendor. Are you planning any out reach efforts for the SMB market?

BE: “The most explosive growth we’ll see for the foreseeable future will be in the mid-size market.” This will be pursued largely through a channel strategy. SAP will also be increasing its marketing budget in this area.

“It’s like the wake behind the boat. A lot of the market might think of SAP as an ERP company… but we’re actually the number one cloud company by paying subscribers in the world.”

HANA in the cloud offers the mid-market an opportunity to use Amazon to access this big data engine overnight.

BJ: I’m going to turn to our social media feeds for any questions from the audience now.

@brianjjackson I'd be interested in hearing his outlook on Canadian demand for human capital management solutions (like SuccessFactors).

— Shane Schick (@shaneschick) July 16, 2013

BE: SuccessFactors is the number one cloud product in SAP’s portfolio. The human capital management (HCM) market probably won’t support all the competitors launching products in this category. “I can’t predict which one will fall off. But SAP is likely to continue at the forefront of the market.”