"The SMB clientele will be addressed entirely through the channel"

DQW Bureau
New Update


SAS Institute has finally realized that to ensure rapid growth,

it has to take its solutions through the channel, especially if it needs to make

inroads into the fast-growing SMB market. Phillip Beniac, VP-APAC, SAS

Institute and Miles Mahoney,VP-Strategic Alliance and Channels, Worldwide

Marketing, SAS Institute explain that having rolled out the channel program in

the US, the company has learnt some lessons and incorporated several changes in

the program to take it to 13 other countries, including India.

What is your core customer clientele?

Beniac: We have around 5,500 customers in APAC alone. We have been in

operation from the US for 25 years and are present in the APAC region for the

past 15 years. The US contributes 40 percent to our overall revenues, EMEA

brings in another 44 percent and APAC 11 percent. This makes APAC our third

largest market. We hope this number to go up to 15 percent.


SAS has traditionally being working with enterprise customers.

Why is it now looking at the SMB segment?

Beniac: What we have noticed is a dramatic increase in demand from the

mid-sizes or SMB companies.

Our strategy for the last five years has been to target only the

corporate houses. But we are seeing the market open up. So far, we got our

marketshare of 25 percent of the global business by going purely to the

corporates. Now, if we want to increase our marketshare, we have to look beyond

the enterprise to the next set of business intelligence (BI) application, which

is the SMB clientele. Currently, the SMC constitutes 35 percent of the overall

BI applications market.


Phillip Beniac,
VP-APAC, SAS Institute

SAS has decided to operate through the channel. What made you

take this decision after almost 25 years of going direct?

Mahoney: We realized that if we want to cater to the SMB customers, the best

way of going to market is through the channel. This is why we launched our

reseller program in the US in 2006. Since then, we have been building support

and infrastructure to manage the channel across other countries as well.


Why did you not launch a global channel program rather than

introducing it in the US first?

Mahoney: Since the channel was a new business area for us, we wanted to go

about it gradually. We have 86 resellers under the channel program and they are

instrumental in bringing in 250 customers. Now, we are looking at recruiting

more partners to our channel network. In the first phase, we will take our

reseller program to 13 countries outside the US, including India.


What USP are you offering the channel?

Mahoney: Earlier, a solution provider would have to go to two to three

vendors for various application components to cater to the BI need of a

customer. Now they can get everything from us, which eases their business


We have also created nine new application bundles that partners

can select to address the various BI needs of their customers. These are span

data collection, integration, analysis and reporting.


Since you are new to the channel, how will you ensure that you

will meet their needs?

Mahoney: Our direct sales team was earlier interacting with the customers

and we have derived from their experiences, to put in a foundation for selling

and have invested in support for the customer and the channel. This will be

extended to the channel.

What kind of customers would you like to work with through your

channel in India?

Mahoney: Our partners can work with companies with a valuation of up to $200

million, which falls under our definition of the SMB market. We term companies

that have a valuation of above this figure and up to $1billion as the mid-sized

organizations, and here our direct sales will work with our partners. They will

also hand the enterprise customers of over $1 billion valuation. So the SMB

clientele will be addressed entirely through the channel.


Miles Mahoney


Alliances and Channels, Worldwide Marketing, SAS Institute

Who decides which channel partner will handle which companies in

the mid-markets segment? Won't this give rise to channel conflicts?

Mahoney: For this, we have come up with a registration system. If a partner

registers a customer with us, he will have the exclusivity to handle that

customer for nine months.

What is the channel compensation model that you have devised?

Mahoney: We have YoY renewal model and have a 95 percent renewal rate.

Partners who get the renewals will get 25 percent of that annual renewal coupled

with some other perks which in turn are dependent on factors like customer

satisfaction ratio, number of people trained, and ability to up sell and get

more packages.

Additionally, partners get a teaming fee for getting new

accounts registered with us and this could be across any of the business

segments we target directly or indirectly.

We have also allowed for a little bit of localization of our

current channel programs for all geographies. So while 70 percent of the program

will have a global de facto outline, the remainder could be tweaked for local


What is the kind of support infrastructure you have put in


Mahoney: Each place will have a local country channel account manager to

work with partners. We will also have an online repository for them to

get technical knowledge and realtime information about SAS. We will also impart

training to their team, though we will not issue any physical certificates.

We are looking at signing up around seven partners in India by

the end of 2007. While signing up partners we will look at their ability to sell

BI applications, the geographies they operate in and their domain knowledge.

What is the biggest challenge for SAS as it embarks on indirect


Mahoney: Our biggest challenge is getting our message across to the right

partners and getting our name out front to customers. Also, making the channel a

part of our corporate DNA will also take time, since for a quarter century, we

were talking to customers directly.

Vinita Bhatia