How Software Vendor Partnerships with SAP Restrict Competition in Favor of SAP

Executive Summary

  • The reality of the SAP partnership program is far different than what is usually presented.
  • SAP uses its partnership program as a primary tactic to reduce competition from other software vendors.

Video Introduction: SAP Partnership Program

Text Introduction (Skip if You Watched the Video)

SAP has the most extensive vendor partnership program of any software vendor worldwide. This program presents the following characteristics to SAP customers and the outside world. SAP has enormous control over its partners, and the arrangement is anti-competitive and corrupt. Once in a partnership with SAP, SAP has approval over the partner’s marketing, often restricting any language that would make a vendor partner from being competitive with an SAP product. You will learn how SAP has weaponized its partnership program against partners.

Lack of Financial Bias Notice: We have no financial ties to SAP or any other entity mentioned in this article.

  • This is published by a research entity.
  • Second, no one paid for this article to be written, and it is not pretending to inform you while being rigged to sell you software or consulting services. Unlike nearly every other article you will find from Google on this topic, it has had no input from any company's marketing or sales department. 

The Reality of the SAP Partnership Program

To the outside world and SAP customers, the SAP vendor partnership program seems legitimate and even beneficial to SAP customers.

After many years of discussing the partnership program with many software vendors, a very different picture of the SAP vendor partnership program appears. In many cases, the SAP vendor partnership program may be viewed as not a partnership program, but as another anti-competitive tool SAP uses to restrict competition in the marketplace.

The SAP Partnerships for the Software Vendor

Salespeople in vendors that compete with SAP should know, and often do know, that even if your company is a partner with SAP, that only counts for something as long as SAP sees it in its best interests to keep a civil relationship. SAP does not like other software vendors and usually is looking for a way to compete in their area. That means partnerships with SAP often tend to be amicable only over short periods. And our service applies to every software vendor that competes with SAP, whether they partner with SAP or not.

SAP is well-known for preventing customers from buying applications from SAP partners’ software vendors. Therefore, we describe the dynamic of being a software partner with SAP as a bit like an abusive relationship. SAP would not hit you so hard if they did not love you so much.

What is the Ostensible Purpose of Software Vendor Partnerships?

The ostensible purpose of partnerships among software vendors is to increase integration — but this could be better facilitated by directly publishing APIs. There is no reason for vendors to scheme with each other and engage in speech-limiting agreements called partnership agreements. Teradata was silent for years and could not speak because of their partnership agreement. I have not seen this commented on a single time that Teradata was bound from talking about what amounted to commercial abuse due to a partnership agreement.

IBM and Oracle have also restricted their criticisms of SAP’s false statements around HANA because of their partnership agreement.

Maybe this is an excellent time to evaluate what these partnership agreements do for the common good. Partnerships impinge on the freedom of speech of the minor partner, and they allow one entity to control another without actually acquiring that entity. Companies in a partnership agreement can agree to things that aren’t in agreement.

Why Are Vendor Partnership Programs Necessary for Corporate Buyers?

One might argue that SAP does not need a partnership program at all. However, if it did not have one, customers would not see the logos and gradually accept that any application can be connected to SAP. In this way, the SAP partnership is much like a racket. It creates a need that did not exist before the partnership program, and the resolution is becoming an SAP partner, which allows SAP to exert its will over competitive vendors.

  • By becoming an SAP partner, the software vendor falls under the influence and the rules and regulations of SAP, which are entirely designed to the benefit of SAP and the liability of the
    software vendor partner.
  • SAP interference with vendor partners has even gone to the extreme, where SAP has contacted software vendors and asked them to discontinue their products. Suppose that software vendor complies with SAP’s request. In that case, SAP offers them compensation referrals to specialize in consulting in SAP products, which of course, is a direct competitor to the product that SAP would like to see removed from the marketplace. In many cases, “killing” an application requires purchasing the software vendor. However, in this case, SAP could attempt to do it (it did not work) through the partnership program.
  • SAP has used partnership programs in the past. Notably, the xApp program that Brightwork covered in the article, Its Time for the xApp Program to be Terminated, takes IP from partner software vendors.

Why Software Partnerships with SAP Tend to Sour

SAP will often use partnerships to gain entry into areas where it lacks an offering. It uses the connection to co-opt the site. Then it uses the area’s understanding, often obtained from the unwitting software partner, to develop a solution that completes with its software partner. SAP is complimentary and friendly with the software partner when they want to pull information from them but then switches to a different mode when SAP feels like they have gotten what they needed from the relationship.

SAP is well-known for preventing customers from buying applications from SAP partners’ software vendors. Therefore, we describe the dynamic of being a software partner with SAP as a bit like an abusive relationship.

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