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SAP's Infill Strategy--New Details

SAP has been selling primarily into its installed base for some time, now. Recent conversations suggest that SAP no longer sees this as some temporary aberration. Instead, it sees the problem of infill--finding more to sell to the same customers--as the essential problem to solve.

Conversations last week with several SAP personnel can help us to understand some short term and long term aspects of this strategy.

Long term, it has become clear that SAP sees its future in infrastructure. At Markets last week, the conversation was not about B2B, it was all integration frameworks and app servers and Hasso's speech at the Java convention.

For SAP, retreating from B2B and returning to bytes and memory allocation is a very good thing. They are strong technically, and they have never demonstrated that they understand B2B.

One odd effect of this is that it now seems highly unlikely that Portals will be spun back out. Portals is part of SAP's infrastructure play, and the new apps-on-apps that Portals showed off are planned to be the next big thing after the infrastructure play.

Short term, the most important fact is that the infill strategy does not mean a change in revenue allocation. SAP remains committed to partner strategies. Currently, SAP salespeople can't get any commission for service revenue unless they meet their license quota.

Since license revenue remains difficult to accumulate in small bites, SAP has thrown its named account salespeople one bone. They now get to sell the Portals products. Since these products are quite different from the core SAP products, and since the named account salespeople have no knowledge of how to sell them, I'm not sure it helps. Indeed, it may slow sales somewhat.

See also our other recent Short Takes.