The entry of SAP into the mid-market fray with its Business One application has been one of the more interesting developments in a consolidating accounting software market. What are this product’s chances?

It’s too early to say whether Business One can succeed as more than a niche player, serving divisions of larger corporations who are familiar with SAP from their use of its enterprise software. But over the last two years, SAP has done the things necessary to give itself a chance to succeed.

It has recruited knowledgeable people—people with experience in managing channel-based distribution systems. It has probably hit the market at an opportune time in offering a product that combines accounting and CRM functionality in the same code base. And it has recruited VARs that have good track records for selling accounting systems into the mid-market.

The fact that the mid-market is dominated by two major players--Microsoft Business Solutions and Best Software--with broad name recognition for their products is a challenge. Toss in Intuit’s hold on the small business market and even with SAP’s recognition at the high-end, there are high hurdles.

Still, SAP has been able to recruit resellers from all the remaining players—MBS, Best, and Epicor, as well as bringing along some channel members from the SAP world.

Why are resellers interested? Security. Earlier this year, one MBS reseller noted he was looking at Business One because he didn’t want to put all his eggs in the Microsoft basket. It wasn’t all that long ago that Epicor demanded its resellers handled only Epicor products. Resellers haven’t forgotten that lesson. Meanwhile, MBS has not been setting the market on fire in the U.S.

The SAP name also provides and entry to organizations that mid-market resellers haven’t been able to reach. That SAP name does help open some doors. It also helps that, just maybe, having one product combine accounting and CRM is the winning formula.

SAP’s other major asset is its size. It had roughly $7.025 billion in total sales and $2.1 billion in software sales for 2003. It can play for the long haul.

And it has to be in it for the long haul to succeed. When Navision was an independent company, it only had $40-some million in revenue in the United States after five years of steady reseller recruitment. Five years is probably the minimum time investment a vendor can make and be considered a serious player.

As the Carpenters once sang, “We’ve only just begun.”

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