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SAP aims to tighten partner ties

The business software company unveils a program to bolster its relationship with partner companies.

SAN FRANCISCO--SAP laid out a plan to bolster relationships with its ecosystem of partners and customers at a conference on Tuesday.

The company is hoping to use its network of partners--other technology makers that build products that work with SAP's applications--to help it develop software that's needed to help customers run their businesses.

"We believe the ecosystem will be key to our success," Shai Agassi, SAP product and technology group president, said during a speech to partners and customers on Tuesday. "We are not paying lip service to that. We actually think there is a very interesting community that is getting built and it's represented in this room."

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Video: SAP CEO sees enterprise software growth
Henning Kagermann tells developers that SAP has plenty of ideas for growth.

With its Enterprises Services Community program, SAP hopes to create a governing and compliance body comprised of independent software developers, system integrators and customers. The program is designed to serve as a means for participants to grow their business and get feedback on their ideas.

"If a company puts in a solution in the market that makes other people fail, then we all fail as a community," Agassi said. "This will be a model for enterprise services and how new ideas are proposed, developed and offered into in the market."

The community is launching with more than 60 members, including Arla Foods, Adobe, Cisco Systems and Vendavo.

Analysts and some SAP partners have noted that in the past the applications giant did not seem that interested in fostering a strong relationship with its partners.

Brendan Barnicle, an analyst with Pacific Crest Securities, said SAP and other companies that seek to build a stack of related software will increasingly come into conflict with their channel partners as they expand their footprint in various markets.

"It will be a systematic process," Agassi said. "The (community partners) have to be successful for this whole model to work. If you don't make money in this process, we're not successful. We know that and we understand that."

SAP is also bringing a number of its partner programs under the umbrella group of SAP Partner Edge. The new structure will feature three levels--gold, silver and associate--depending on the depth of the relationship and commitment between the parties.

Agassi said to SAP partners that it does not matter if they want a relationship with its competitors, but they should ultimately select only one to focus on.

That point was reiterated by Zia Yusuf, the recently named executive vice president of the NetWeaver platform ecosystem.

"The deeper the product and go to market commitment, the deeper the partnership," Yusuf said.

But one partner noted NetWeaver has had a slow adoption rate among customers, making it a little more difficult to enter into a virtually exclusive relationship with SAP.

Other partners are content with NetWeaver's adoption rate. One of those customers is Stein Onsrud, chief executive of TraceTracker, which became a NetWeaver independent software developer last year.

Onsrud, however, said his company has an open architecture for tracking movement of items and is currently focused on the food industry.

"We have an open architecture, so we don't want to focus on one vendor. But SAP is core to our solution and is a dominant player in our market," Onsrud said.