Latin American channel-revenue generation leads world for SAP

Friday, November 4, 2011

SAP's (NYSE: SAP) Latin American region leads the world in terms of channel penetration, which brought in 21% of regional revenues in Q3 compared to 18% at the same period last year, Marcelo Giampietro, SAP's director general of Spanish-speaking South America (SSSA), told BNamericas.

The plan is for channel revenues to reach 40% of total sales in the region by 2015. "We are looking to have our partners very focused on the SME segment, which already makes up 77% of the installed customer base," Giampietro said.

To expand partners' weighting in SAP's regional performance, "the idea is to work with our existing partners, and to bring in new partners to the ecosystem. When you change the portfolio and introduce new products in the market, you need a more specialized channel."

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New partners will have a focus on providing added value, he said. "SAP continues to believe that it's one of the companies that can most add value to our clients' business. The value sale process is critical, and it's one of the things we most look for in our partners. They also have to have a high capacity to invest in sales force training. This is a value channel that has to be able to do business on behalf of SAP."

In Q3, software revenues generated in Latin America increased 49%, the company announced previously, which Giampietro said is "a really extraordinary number in an industry where we have the majority of market share. This is thanks to innovation - the change of portfolio that SAP has been able to achieve over the last few years, with new technological propositions." In the services area in Latin America, SAP advanced 42% in Q3, he noted.

The executive highlighted even stronger growth in markets such as the Caribbean, Chile and Argentina.

"Latin America is the region that is growing fastest in the world for SAP," Giampietro said. Currently, the region represents 8-10% of SAP's total revenues.

SAP saw global revenues jump 14% in the third quarter to 3.41bn euros (US$4.7bn), compared to 3.00bn euros in the year-ago period. IFRS profit after tax surged 150% to 1.25bn euros, from 501mn euros in 3Q10.