Yesterday at SAPPHIRE 07 Hans-Peter Klaey talked about their current success in the mid-market as of SAP's best kept secret. As well as explaining their future strategy with A1S and the other products, he explained that they already have 26,000 SME customers, which is 65% of the customer base. He threw out the following statistics to back up their success as the SME market leader:

• 6,500 new SME customers last year
• 27 new customer's each working day
• 1Bn euros of SME licence order entry

He explained how SME is now a line of business inside SAP and talked about their aspirations in the market. He categorized the market in to upper mid, a $10Bn market with 60,000 firms, lower mid, a $19Bn with 1.2m firms, and small, a $14Bn market with 55m firms.

Eric Duffaut talked about the changing business landscape for these firms, and how 65% of their CEO's link IT with their business strategy. They have the same problems as larger enterprises, but they don't have the same money or resources to deal with them, and certainly can't wait a couple of years for an IT system to do the job.

He explained their strategy, but Sig sitting next to me kept count of how many times he used the phrase "go to market" - 14 times! A key message was that whether we are talking A1, B1 or the new A1S product, they need a multi-channel strategy and they need partners to scale to get the volume of sales they need. He talked about the telesales and telecoverage they have already introduced to service and farm existing customers. This style of approach will be a key component of the A1S business model.

When discussing partners he explained how selective they would be, and here are a few of the phrases he used:

"We are not Microsoft"
"We're not shouting for quantity, we want quality"
"Take my hand, you and I will win or fail together"

He was then at great pains to explain that partners wouldn't be measured simply on revenue, and that a small partner would have the ability to achieve Gold certification just as easily as a big one. He also came out with a lot of statistics to highlight the success of their partner programme to date:

• 23,418 of the 26,000 SME customers come from the channel
• 13,541 B1 customers and 9,877 A1 customers
• 1,358 B1 partners and 972 A1 partners
• 350 B1 partner solutions available
• 646 A1 partner solutions available
• 4,110 qualified partner sales people currently

He mentioned there have been 1,200 new SME customers in Q1 of 2007, so it seems the rate of acquisition is still good, but it needs to ramp up dramatically if they are going to get from around 40,000 customers now, to their stated aim of having 100,000 customers by 2010.

The way that they position the 3 mid-range products is that A1 is for the upper mid-market customers who need a highly configurable solution, with best practices and a requirement for deep industry functionality. B1 is for small businesses. A1S is for companies sized between these two, who aren't SAP customers. Several of us think there is a basic flaw in this segmentation. It seems quite strange to be talking about a market segment as non-SAP customers. Although there will be some more complex mid sized businesses who will need the functional richness and customisation of A1, but there will be plenty of businesses that will live the constraints of A1S if the cost of ownership is one tenth of the cost of the other solutions.

Ian Kimbell came on stage to show the way the product is presented on the web, and to give a little (and I mean little) demo. Part of the strategy is to adopt a pull rather than push model. People can come to the website and See, Try, and the Buy. It is also important to note that A1S is a full suite of applications covering ERP, CRM, Accounting - everything a typical manufacturing, service or trading business might need, including things like a web shop. When you try it, you can go for an express trial, which gives you a standard configuration of most things, or you can select module by module. Once you've tried you can hit the buy button. However, an important nuance is that we aren't in a scenario where you then key in your payment details - you select an appropriate partner, key in your details and subsequently receive a quotation.

They showed a few screens of the product. Ian explained that your view of the functionality is role based, and that the interface shows you common tasks, your favourites, sends you alerts, shows you actionable analytics. We got to see the product itself, but if you blinked, you might have missed it.

Some of the answers in the Q&A were quite interesting. They couldn't be specific about how many new partners they might need to help achieve their numbers. When asked to differentiate SAP to Oracle, the answer came back "we are successful!". The panel explained that A1S isn't a Lite version of anything, but a complete, full function suite. Pricing and minimum number of users isn't being disclosed yet, but the "sweet spot" is implementations of 50-100 users. They continued to say they are addressing a different, completely un-tapped market with A1S... but I'm still sceptical about defining non-SAP customers as a segment.