Can SAP Tackle The Small Business Market?

SAP is the 3rd largest software vendor in the world after Microsoft and IBM. With 38,000 large global companies as clients, they are quickly becoming a victim of their own success and are now targeting small businesses to continue their growth.

Yesterday SAP announced that it's going to spend as much as 400 million euros, roughly $520 million, over 2 years to create an organization that can sell to small business clients. With this new move, SAP is expecting their profit margin to drop by 3-4% this year and they will come up against a number of obstacles selling to small businesses including:

• There are more SMB's to target and their needs tend to be more varied
• SMB's require bigger sales and support teams
• SMB's typically also take longer to make buying decisions
• SMB's require more intensive sales advice than larger enterprises

It will be interesting to see what strategies SAP uses to tap the small business market and how successful they are after spending half of a billion dollars.