SAP and Deloitte Sign VAR

Zacks Equity Research
March 13, 2014

On Mar 12, 2014, two leading companies -- SAP AG (SAP) and Deloitte Touche Tohmatsu Limited (Deloitte Global) -- signed a global value-added reseller (VAR) agreement. Per the agreement, going forward, Deloitte will be reselling SAP products and services to its clients, thereby offering a comprehensive portfolio to choose from through a single packaged transaction.

The VAR agreement essentially adds features or services to an exiting product or service and resells it as a comprehensive or integrated product or service, providing complete turn-key solutions.

This is expected to be a win-win agreement for both companies. This deal will help Deloitte offer its clients a more value-added approach in terms of low cost, accelerated benefits to ultimately deliver high quality through effective implementation and maintenance of SAP software solutions. In case of SAP, the deal will be helpful as its products and services will now have a broader market, offering complementary solutions.

Therefore, both companies together will be able to put forward more complete business solutions that include SAP software and SAP maintenance, as well as industry-specific pre-configured solutions, implementation services and application maintenance support services.

SAP and Deloitte have been working through a strategic alliance program and Deloitte currently has about 11,000 clients dedicated to SAP solutions across 135 countries. This VAR agreement is an addition to this. In order to sign the VAR agreement, SAP has explicit entry requirements which include global coverage, strong reseller capabilities and the ability to provide SAP services. Deloitte is one of its few partners to satisfy all these three requirements. 

Prior to this, in Sep 2013, SAP and Hortonworks had signed an agreement whereby SAP will be reselling Hortonworks Data Platform (:HDP) to its customers. Thus, SAP will offer its users a complete enterprise architecture leveraging the industry’s first 100% open-source data platform powered by Apache Hadoop.

SAP currently holds a Zacks Rank #4 (Sell). Some better-ranked stocks in the same sector include Dealertrack Technologies, Inc. (TRAK), Open Text Corp. (OTEX) and Pegasystems Inc. (PEGA). All three carry a Zacks Rank #1 (Strong Buy).

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