In a previous post, I highlighted three primary opportunities for channel partners to consider when exploring SAP's Industry Cloud. One of these opportunities is the ability to leverage a partner's own intellectual property (IP) to introduce an industry cloud solution.
This topic often prompts questions from channel partners regarding white spaces - areas and solutions that SAP does not plan to develop - and the role that partners can play in these areas. In this blog post, I will address the three most frequently asked questions from channel partners.
Does SAP publish white spaces for industry cloud?
Yes! SAP has started publishing Industry Cloud Portfolio opportunities for partners, with more to come in the future. To view these opportunities, partners can access the PartnerEdge portal through this link. It's important to note that, as with most vendors, SAP needs to be cautious about publicly sharing this type of information to avoid giving competitors an advantage in sales cycles. While I don't anticipate that everything will be published, I'm confident that SAP's channel partners will appreciate the opportunity to explore these opportunities. If you require additional detailed insight for a specific solution idea, I recommend arranging a 1:1 meeting under a non-disclosure agreement (NDA). However, I encourage you to consider the other points in this blog post before pursuing that option.
If a partner has a solution idea, it's worth checking the SAP Roadmap Explorer. This tool provides a comprehensive list of all the industry cloud solutions that SAP is planning to develop, as well as those that have already been developed by SAP and its partners. Investigating these overviews is critical to ensure comprehensive research and informed decision-making..
Example from SAP roadmap explorer: the overview for Industrial manufacturing shows that SAP has planned to develop three solutions. And the overview shows that 45 industry cloud solutions are already available.
The SAP roadmap explorer tool also enables partners to search for planned enhancements in SAP core solutions. For example, if a partner sees an opportunity to develop an app for “time sheet” capabilities that they believe are absent in SAP S/4HANA Cloud, they can search for “time sheet” to obtain a summary of SAP's two-year plan for this feature. Once more, it is essential to investigate this overview to ensure thorough research and informed decision-making.
Example from SAP roadmap explorer: improvements on in “time sheet recording” on the roadmap. You can further narrow the search down to a core SAP solution; SAP S/4HANA Cloud or SAP SuccessFactors Time Tracking.
Regarding the listed white spaces for SAP Industry Cloud on the PE portal, it is likely that they may not be relevant for most channel partners. The solution scope for these white spaces is often expansive and geared towards large organizations, requiring a deep understanding of large enterprise best practices and a substantial solution management and development team. Channel partners, however, tend to specialize in serving mid-market companies, which often have different solution needs than large enterprises. As a result, these listed white spaces may not align with the core strengths and expertise of many channel partners.
This presents a fantastic opportunity for channel partners to offer industry cloud solutions to the mid-market, specifically the middle and lower mid-market segment. These segments are not the main focus of SAP development teams or the ISVs recruited into the SAP industry cloud program, creating a "white space" for channel partners to explore.
Channel partners should consider middle and lower mid-market as their white space!
Channel partners often know very well what mid-market organizations need as extensions for their SAP S/4HANA and other core SAP solutions. Leveraging their comprehensive knowledge of the underlying SAP solutions, channel partners can create highly integrated, smart, and efficient solutions, tailored specifically to the SAP stack.
I have spoken with channel partners who have won deals with their solutions over best-of-breed mid-market industry solutions. This is because best-of-breed solutions are not usually designed with SAP S/4HANA in mind and may not fully utilize SAP business processes concepts, master data, and consistent user interface. SAP channel partners are in an excellent position to create an optimal user experience based on an extension of SAP stack and not an integration between two independently developed solutions. They can accomplish this by leveraging SAP BTP, which is the best practice. In my experience, nearly all the channel partners I have worked with use SAP BTP when developing industry cloud solutions..
Finally, watch a video where SAP leadership highly encourages channel partners to develop industry cloud solutions for mid-market.
If I develop a solution and put it on the SAP store, how do I know that SAP will not take over my solution and code?
Firstly, partners do not actually "put a solution on the SAP store." Rather, they provide information about their solutions, which is then published on the store's catalog. It's important to understand that the SAP store serves as a platform for showcasing solution information to potential buyers. To actually obtain the solution, interested parties must contact the partner directly. From there, they can obtain access to the solution directly from the partner
Example from SAP store: if a prospect is interested in a solution, they can leave their contact information, which will then be forwarded to the partner who owns the solution. The partner can then follow up with the prospect directly.
Secondly, SAP’s solution and GTM strategy rely on partners to develop industry cloud solutions. SAP does not want to build everything itself, a significant shift from its past approach of building everything in-house. SAP is now focused on encouraging specialist partners to create solutions, as exemplified by the published white spaces I discussed earlier. Furthermore, SAP seeks to leverage the ecosystem for innovation by urging its partners to develop solution ideas independently. Therefore, it's not just about partners executing on the white spaces identified by SAP.
For instance, I love how Patrick Lamm, the Industry Business Unit (IBU) head of Industrial Manufactures (IM) and owner of the Digital Manufacturing Cloud (DMC), an essential SAP industry cloud solution, talks about the Smart Factory solution from All-for-One, a channel partner. Although both solutions address similar areas, they target customers of different sizes. Patrick suggests that smaller IM firms consider Smart Factory to automate their shop floor. You can watch Patrick's presentation to channel partners on SAP's IM strategy and portfolio if interested. Notably, SAP did not commission All-for-One to develop Smart Factory, nor was it an identified white space. The partner identified it as a white space and developed a solution for it.
The IBUs I have been in contact with share Patrick's attitude in the industrial manufacturing sector. They value and express a keen interest in channel partners developing industry cloud solutions for mid-market.
Finally, partner IP is of course legally protected in the PE build contract that partners have with SAP. There is specific text addressing this topic and partner IP is fully protected
How do I decide what to develop?
Given all this, what should a channel partner do regarding a white space for developing an industry cloud solution?
In my view, the best approach is to focus on internal resources rather than looking for white spaces from SAP. Consider the following points:
Channel partners have developed expertise and assets in the past for a reason, and those reasons are still relevant today - customers need them! These partners have a business model that leverages their industry strength to target specific markets and sell SAP solutions with their own services and sometimes even own IP. By developing an industry cloud solution in the same industry and target market, channel partners can tap into a market for their solution right from day one.
In all the 30+ cases so far where a channel partner has developed an industry cloud solution, the white space has been identified by the partner itself.
What if another partner has already built something similar for mid-market? SAP’s industry cloud program is an open program that allows any partner to develop their industry cloud solution, if it complies with industry cloud guidelines. Therefore, a channel partner has two options: 1) collaborate with another partner to leverage their solution, or 2) develop a solution themselves.
For instance, in the Apple app store, there are many rain-forecast apps, each offering varying functionality and catering to different user preferences. From personal experience I can report that my wife prefers to use another weather app than I do. This suggests that there is room for multiple industry cloud solutions, leading to many innovation opportunities not only on the functional side but also on the go-to-market side.
Are you an SAP channel partner and would like to discuss the topic of white space or any other topic discussed in the blog post? Please feel free to contact me (finn.backer@sap.com).
Also, you might be interested in reading my previous blog post about the ideal profile of a channel partner for SAP Industry Cloud
This topic often prompts questions from channel partners regarding white spaces - areas and solutions that SAP does not plan to develop - and the role that partners can play in these areas. In this blog post, I will address the three most frequently asked questions from channel partners.
Does SAP publish white spaces for industry cloud?
Yes! SAP has started publishing Industry Cloud Portfolio opportunities for partners, with more to come in the future. To view these opportunities, partners can access the PartnerEdge portal through this link. It's important to note that, as with most vendors, SAP needs to be cautious about publicly sharing this type of information to avoid giving competitors an advantage in sales cycles. While I don't anticipate that everything will be published, I'm confident that SAP's channel partners will appreciate the opportunity to explore these opportunities. If you require additional detailed insight for a specific solution idea, I recommend arranging a 1:1 meeting under a non-disclosure agreement (NDA). However, I encourage you to consider the other points in this blog post before pursuing that option.
If a partner has a solution idea, it's worth checking the SAP Roadmap Explorer. This tool provides a comprehensive list of all the industry cloud solutions that SAP is planning to develop, as well as those that have already been developed by SAP and its partners. Investigating these overviews is critical to ensure comprehensive research and informed decision-making..
Example from SAP roadmap explorer: the overview for Industrial manufacturing shows that SAP has planned to develop three solutions. And the overview shows that 45 industry cloud solutions are already available.
The SAP roadmap explorer tool also enables partners to search for planned enhancements in SAP core solutions. For example, if a partner sees an opportunity to develop an app for “time sheet” capabilities that they believe are absent in SAP S/4HANA Cloud, they can search for “time sheet” to obtain a summary of SAP's two-year plan for this feature. Once more, it is essential to investigate this overview to ensure thorough research and informed decision-making.
Example from SAP roadmap explorer: improvements on in “time sheet recording” on the roadmap. You can further narrow the search down to a core SAP solution; SAP S/4HANA Cloud or SAP SuccessFactors Time Tracking.
Regarding the listed white spaces for SAP Industry Cloud on the PE portal, it is likely that they may not be relevant for most channel partners. The solution scope for these white spaces is often expansive and geared towards large organizations, requiring a deep understanding of large enterprise best practices and a substantial solution management and development team. Channel partners, however, tend to specialize in serving mid-market companies, which often have different solution needs than large enterprises. As a result, these listed white spaces may not align with the core strengths and expertise of many channel partners.
This presents a fantastic opportunity for channel partners to offer industry cloud solutions to the mid-market, specifically the middle and lower mid-market segment. These segments are not the main focus of SAP development teams or the ISVs recruited into the SAP industry cloud program, creating a "white space" for channel partners to explore.
Channel partners should consider middle and lower mid-market as their white space!
Channel partners often know very well what mid-market organizations need as extensions for their SAP S/4HANA and other core SAP solutions. Leveraging their comprehensive knowledge of the underlying SAP solutions, channel partners can create highly integrated, smart, and efficient solutions, tailored specifically to the SAP stack.
I have spoken with channel partners who have won deals with their solutions over best-of-breed mid-market industry solutions. This is because best-of-breed solutions are not usually designed with SAP S/4HANA in mind and may not fully utilize SAP business processes concepts, master data, and consistent user interface. SAP channel partners are in an excellent position to create an optimal user experience based on an extension of SAP stack and not an integration between two independently developed solutions. They can accomplish this by leveraging SAP BTP, which is the best practice. In my experience, nearly all the channel partners I have worked with use SAP BTP when developing industry cloud solutions..
Finally, watch a video where SAP leadership highly encourages channel partners to develop industry cloud solutions for mid-market.
If I develop a solution and put it on the SAP store, how do I know that SAP will not take over my solution and code?
Firstly, partners do not actually "put a solution on the SAP store." Rather, they provide information about their solutions, which is then published on the store's catalog. It's important to understand that the SAP store serves as a platform for showcasing solution information to potential buyers. To actually obtain the solution, interested parties must contact the partner directly. From there, they can obtain access to the solution directly from the partner
Example from SAP store: if a prospect is interested in a solution, they can leave their contact information, which will then be forwarded to the partner who owns the solution. The partner can then follow up with the prospect directly.
Secondly, SAP’s solution and GTM strategy rely on partners to develop industry cloud solutions. SAP does not want to build everything itself, a significant shift from its past approach of building everything in-house. SAP is now focused on encouraging specialist partners to create solutions, as exemplified by the published white spaces I discussed earlier. Furthermore, SAP seeks to leverage the ecosystem for innovation by urging its partners to develop solution ideas independently. Therefore, it's not just about partners executing on the white spaces identified by SAP.
For instance, I love how Patrick Lamm, the Industry Business Unit (IBU) head of Industrial Manufactures (IM) and owner of the Digital Manufacturing Cloud (DMC), an essential SAP industry cloud solution, talks about the Smart Factory solution from All-for-One, a channel partner. Although both solutions address similar areas, they target customers of different sizes. Patrick suggests that smaller IM firms consider Smart Factory to automate their shop floor. You can watch Patrick's presentation to channel partners on SAP's IM strategy and portfolio if interested. Notably, SAP did not commission All-for-One to develop Smart Factory, nor was it an identified white space. The partner identified it as a white space and developed a solution for it.
The IBUs I have been in contact with share Patrick's attitude in the industrial manufacturing sector. They value and express a keen interest in channel partners developing industry cloud solutions for mid-market.
Finally, partner IP is of course legally protected in the PE build contract that partners have with SAP. There is specific text addressing this topic and partner IP is fully protected
How do I decide what to develop?
Given all this, what should a channel partner do regarding a white space for developing an industry cloud solution?
In my view, the best approach is to focus on internal resources rather than looking for white spaces from SAP. Consider the following points:
- Which industries are you successful in today? Any special niche markets?
- What type of industry Qualified Partner Package Solution (QPPS’s) do you already have?
- What do your mid-market customers and/or prospects need on top of core SAP solutions?
- What types of templates or code do you already have in place?
- Can you standardize any industry-specific templates and code, and perhaps expand upon them based on your customers' needs?
- Do your customers have any specific pain points not address in SAP?
- How can you transform specialist knowledge of your implementation consultants into repeatable IP?
Channel partners have developed expertise and assets in the past for a reason, and those reasons are still relevant today - customers need them! These partners have a business model that leverages their industry strength to target specific markets and sell SAP solutions with their own services and sometimes even own IP. By developing an industry cloud solution in the same industry and target market, channel partners can tap into a market for their solution right from day one.
In all the 30+ cases so far where a channel partner has developed an industry cloud solution, the white space has been identified by the partner itself.
What if another partner has already built something similar for mid-market? SAP’s industry cloud program is an open program that allows any partner to develop their industry cloud solution, if it complies with industry cloud guidelines. Therefore, a channel partner has two options: 1) collaborate with another partner to leverage their solution, or 2) develop a solution themselves.
For instance, in the Apple app store, there are many rain-forecast apps, each offering varying functionality and catering to different user preferences. From personal experience I can report that my wife prefers to use another weather app than I do. This suggests that there is room for multiple industry cloud solutions, leading to many innovation opportunities not only on the functional side but also on the go-to-market side.
Are you an SAP channel partner and would like to discuss the topic of white space or any other topic discussed in the blog post? Please feel free to contact me (finn.backer@sap.com).
Also, you might be interested in reading my previous blog post about the ideal profile of a channel partner for SAP Industry Cloud
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