As SAP con­tin­ues its heavy focus on Mid­mar­ket cus­tomers in the Amer­i­c­as — and secures RISE with SAP, SAP S/4HANA Cloud, SAP Busi­ness Tech­nol­o­gy Plat­form (BTP), and oth­er solu­tion growth in that sec­tor — ASUG caught up with a key high-ener­gy SAP leader in the space.

In this wide-rang­ing inter­view, Greg Petraetis, SVP and Man­ag­ing Direc­tor of Mid­mar­ket and Part­ner Ecosys­tem, North Amer­i­ca, revis­its pre­vi­ous top­ics of con­ver­sa­tion and cov­ers new ground, includ­ing North Amer­i­ca as the ​“net new cus­tomer engine,” SAP growth-dri­ving solu­tions, and remark­able inno­va­tions by customers.

This is an edit­ed ver­sion of the com­plete inter­view.

Ques­tion: This dis­cus­sion is a bit of a look-back and look-for­ward. What were the tech­nol­o­gy and solu­tion high­lights, and the major busi­ness and strat­e­gy achieve­ments for SAP, in the mid­mar­ket sec­tor in 2022?

Answer: It’s all about the cloud. Across the com­pa­ny, we’ve seen dou­ble-dig­it growth in the cloud year-over-year. With SAP S/4HANA Cloud, our cloud back­log has more than dou­bled as of last year’s earn­ings, so real progress and momen­tum are hap­pen­ing with­in the orga­ni­za­tion. When we spoke last year (2021), we talked a lot about RISE with SAP, which remains a huge pri­or­i­ty for this mar­ket. If you look at the sta­tis­tics, 65% of the RISE deals that were done this year were done in the Midmarket.

Q: What’s the mid­mar­ket telling you it needs?

A: Our cus­tomers val­ue a concierge process that’s fric­tion­less, ready-to-use, and built on proven indus­try best prac­tices. Our cus­tomers want to take a fit-to-stan­dard approach to their busi­ness. They don’t want heavy cus­tomiza­tion or heavy con­fig­u­ra­tion. They want val­ue, ease, and speed.

They don’t nec­es­sar­i­ly have huge IT teams to make all of that hap­pen, so they’re look­ing to us for help. For the indus­tries that are ready right now for pub­lic cloud, we (along with our part­ners) are shar­ing with our cus­tomers what that roadmap looks like. 

We will con­tin­ue to invest very heav­i­ly in the mar­ket­ing, sales, and sup­port of that prod­uct because cus­tomers see val­ue right away; we can deliv­er the ini­tial scope with­in 30 days or less. We can decrease imple­men­ta­tion costs pret­ty dra­mat­i­cal­ly. We’re giv­ing our cus­tomers 40% to 60% faster time-to-val­ue. We’ve seen that’s hold­ing true. 

Q: Can you talk about cer­tain cus­tomers or industries?

A: Yes. One of the fast-grow­ing indus­tries where we are see­ing a lot of inter­est is life sciences. 

The biggest chal­lenge we’re see­ing in the mid­mar­ket is how to scale quick­ly. SAP S/4HANA Cloud, pub­lic edi­tion is a ready-to-run solu­tion. Because of how SAP S/4HANA Cloud, pub­lic edi­tion is imple­ment­ed, cus­tomers are able to get up and run­ning, dig­i­tize their busi­ness process­es, and get vis­i­bil­i­ty into the busi­ness — in finance, man­u­fac­tur­ing, dis­tri­b­u­tion, and cus­tomer ser­vice — that they did­n’t have before. The end result is that they’ve been able to push out prod­ucts to their cus­tomers much more quick­ly, in a way that sup­ports busi­ness growth, and they’re able to do that profitably.

I’m excit­ed about the pub­lic cloud and its poten­tial with our cus­tomers. A lot of the cus­tomers that we’re talk­ing to — both net-new to SAP as well as lega­cy ECC cus­tomers — want to take our 50 years of expe­ri­ence and use it to get to a sim­ple, clean, sus­tain­able envi­ron­ment to back their business.

Q: What progress points are you most proud of when you reflect on 2022?

A: There are so many things, but most­ly it’s the work we are doing with our cus­tomers and our incred­i­ble ecosys­tem of partners.

First, many mid­mar­ket cus­tomers are mak­ing their first major sys­tems deci­sion, are going through their first major dig­i­tal trans­for­ma­tion effort, or have yet to buy from SAP. With dif­fer­ent points in depar­ture — whether it’s ERP, human cap­i­tal man­age­ment, Intel­li­gent Spend, or what­ev­er the case may be — we have the plea­sure of help­ing them where they need to go. They’re join­ing the SAP fam­i­ly in droves, and I’m excit­ed about that. 

Next, it’s the work we can do with our amaz­ing ecosys­tem. Our cus­tomers are buy­ing for big rea­sons: for our indus­try cre­den­tials, IP, sub­ject mat­ter exper­tise, appli­ca­tions, plat­form, and port­fo­lio. They’re invest­ing in the infor­ma­tion infra­struc­ture that they need to sup­port the growth of their busi­ness and the appli­ca­tions engi­neered on top of it. They’re buy­ing into the three and a half mil­lion peo­ple sur­round­ing this com­pa­ny: the com­mu­ni­ty of cus­tomers, part­ners, and the peo­ple who will be there to help them inno­vate in the cloud. This incred­i­ble ecosys­tem — and the dia­logue we can help facil­i­tate — is one of the hall­marks of how we do business. 

Last year when we met, I talked about the ACV part­ner­ship and the impor­tance of the Think Tank con­nec­tions. We’re con­tin­u­ing with these con­ver­sa­tions, and we’re extend­ing the con­ver­sa­tion into new venues. A good exam­ple is our Part­ner Advi­so­ry Coun­cil, where we bring our part­ners in to help share, col­lab­o­rate around issues, ideas, think­ing, and best prac­tices, and get feed­back on what’s work­ing and how we can do busi­ness bet­ter. As our port­fo­lio becomes broad­er, our part­ners are col­lab­o­rat­ing, tap­ping one another’s strengths, and work­ing togeth­er for the suc­cess of our cus­tomers. We firm­ly believe it’s not SAP and the ecosys­tem; SAP is part of an ecosystem. 

We are pio­neer­ing some new routes to mar­ket with our Strate­gic Ini­tia­tives Team. With one of every three oppor­tu­ni­ties backed by an invest­ment firm, it’s an impor­tant avenue for growth. A few months ago, we had a sum­mit where we brought in the oper­at­ing part­ners from invest­ment firms, our imple­men­ta­tion part­ners, and tech­ni­cal advi­sors with SAP to fig­ure out how to scale our approach for invest­ment-backed firms and cre­ate more repeat­able suc­cess for those com­pa­nies with­in the ecosystem. 

We’re start­ing to see incred­i­ble trac­tion and scale with invest­ment-backed com­pa­nies— and that sum­mit helped set the stage for that inter­ac­tion. They turn to SAP because they want a sys­tem they can nev­er out­grow, and SAP has the solu­tions to do just that. We’re catch­ing them through­out their tran­si­tions from being inno­va­tors to being dis­rup­tors, cat­e­go­ry lead­ers, and glob­al leaders. 

Q: What are the cus­tomer voic­es say­ing to you as far as their chal­lenges in 2022 and bridg­ing into 2023?

A: Mid­mar­ket orga­ni­za­tions are no dif­fer­ent than large enter­pris­es with a lot of the chal­lenges they’re seeing. 

They’re plac­ing an empha­sis on dig­i­ti­za­tion, inno­va­tion, and effi­cien­cy, espe­cial­ly in the face of sup­ply-chain pressures. 

They’re also think­ing about work­er and knowl­edge gaps and invest­ing in tal­ent man­age­ment, upskilling, and soft­ware that sup­ports automa­tion and greater employ­ee effi­cien­cy to increase engage­ment. It’s every­thing from hir­ing to retire­ment because, in mid­mar­ket com­pa­nies, their human cap­i­tal is a very impor­tant asset for them. It’s all about the people. 

Of course, some near-term eco­nom­ic fac­tors — infla­tion, reces­sion, more expen­sive cap­i­tal — are top of mind for them, as well.

Q: Is the prospect of a reces­sion com­ing up as a con­cern? Are cus­tomers real­ly high­light­ing that?

A: Yes, and from my view, it hasn’t ham­pered invest­ment in technology. 

Cus­tomers are look­ing at dig­i­tal invest­ments and mak­ing thought­ful deci­sions about when and where they’ll invest. In cer­tain indus­tries in the Mid­mar­ket, our busi­ness is grow­ing astro­nom­i­cal­ly year-over-year, and tech­nol­o­gy is a big part of that agen­da. Net-net, our cus­tomers are will­ing to spend a dol­lar if they can get five in return, but they’re very dis­crim­i­nat­ing about where and how they spend. The good news is that we have the solu­tions to keep up with these challenges.

Q: Are cus­tomers also ask­ing for and want­i­ng to under­stand more about SAP Busi­ness Tech­nol­o­gy Plat­form, more about SAP Sig­navio, more about the larg­er port­fo­lio of solu­tions — CRM, HXM, etc.?

A: Absolute­ly.

Any­thing with cus­tomer rela­tion­ship man­age­ment — name­ly, find­ing ways to engage, ser­vice, and mar­ket with their cus­tomers — is crit­i­cal for our customers.

At the same time, they know human cap­i­tal man­age­ment is crit­i­cal to the suc­cess and growth of their busi­ness. They want to recruit the right peo­ple, onboard and enable them quick­ly, have ways to man­age their progress and per­for­mance, and opti­mize their total rewards pack­ages. Our Suc­cess­Fac­tors suite and the mod­u­lar approach we can take into address­ing those needs as they evolve for those com­pa­nies is a real­ly attrac­tive offer­ing for them. They can address each one of those needs dis­creet­ly or take a full-suite approach. 

Oper­at­ing part­ners at pri­vate equi­ty firms real­ly like Sig­navio because it helps them under­stand the per­spec­tive ben­e­fits of new tech­nol­o­gy and quan­ti­fy the ben­e­fit of it. They also love the busi­ness process intel­li­gence infor­ma­tion it gives them because they can see the promise they’ve invest­ed in because peo­ple are using the tech­nol­o­gy the way it’s sup­posed to be used. It’s an incred­i­bly pow­er­ful tool. 

We’ve also seen huge inter­est in BTP. BTP is an exten­si­bil­i­ty frame­work that can not only help inte­grate and sup­port oth­er tech­nol­o­gy stan­dards but also can devel­op on top of that plat­form (or have our com­mu­ni­ty devel­op­ing on top of that plat­form) so that cus­tomers are always on the lead­ing edge of inno­va­tion. BTP, com­bined with what our part­ners are devel­op­ing, is a clear dif­fer­en­tia­tor in our cus­tomer tech­nol­o­gy stack.

Q: Now it’s pre­dic­tion time. What are your pre­dic­tions of progress, improve­ment, and obsta­cles for the Mid­mar­ket sec­tor and Mid­mar­ket com­pa­nies in North Amer­i­ca in 2023?

A: We’ve been in part­ner­ship with our cus­tomers for 50 years, and we’ve seen our cus­tomers through some real­ly major trans­for­ma­tion­al moments. Right now, peo­ple say we’re in an impend­ing reces­sion; I say we’re actu­al­ly in a reces­sion, and we’re help­ing them through the next phase of their busi­ness. What’s clear is that we’ve got a real­ly incred­i­ble ecosys­tem of employ­ees, part­ners, and cus­tomers help­ing oth­er orga­ni­za­tions weath­er the eco­nom­ic storm. Togeth­er, we are look­ing at this as an oppor­tu­ni­ty to dou­ble down so that they come out of this thing pound-for-pound stronger when the reces­sion is over.

One of the con­stants dur­ing these moments is that our cus­tomers con­tin­ue to seek us out as a trust­ed advi­sor to help with their busi­ness. We’re being seen as a strate­gic part­ner to get them where they want to go faster. The major­i­ty of our cus­tomers will go live with our solu­tions in sev­en to nine months. They don’t even need to wait a year to start mov­ing in the direc­tion they want to go.

As far as what suc­cess will look like when I come back next year: I will tell you all about the new cus­tomers that we’ve signed dur­ing 2023, that they’ve gone live, and that they’re suc­cess­ful on SAP. We’ll let the results speak for themselves.

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