Optimal’s Big Midmarket Push

By Rory Doherty
Editorial Director, Optimal SAP Advisor.

One of the more significant announcements issued earlier this week by SAP during SAPPHIRE was the company’s impressive 28% year-over-year growth rate in the SME market segment for the first quarter of 2008. SAP credits its partner ecosystem for this impressive growth, noting that 85% of its SME customer base is generated by partners.

In line with SAP’s expanding partner ecosystem and stated goal of having 100,000 customers by 2010, Optimal Solutions Integration announced during SAPPHIRE that it has been named an SAP® Business All-in-One channel partner, and that Tailwind Capital Partners has made an equity investment in Optimal and will be the lead investor for providing and arranging up to $100 million in financing to accelerate Optimal’s aggressive growth strategy of selling SAP solutions and services to middle-market companies in North America.

According to Forrester Research, the midmarket has increasingly become the most strategic space for enterprise software makers as growth in the sector has begun outpacing sales to larger companies. SAP’s base of more than 35,688 SME customers (75% of SAP’s overall customer base) gives the company a leg up on competitors and positions it well to capitalize on the SME market segment moving forward.

Tailwind’s sizable investment in Optimal is a strong testament to SAP’s SME growth potential and Optimal’s ability to serve the unique needs of midsize companies.

“Optimal is a trusted Premier SAP Consulting Partner that is extremely well positioned to capitalize on the growing demand among middle-market companies for SAP solutions that drive innovation and growth,” said Frank Sica, managing partner of Tailwind Capital Partners. “Optimal’s impressive year-over-year growth since its inception in 1995 and their proven track record delivering SAP-based solutions to companies with complex global operations attests to the talent and commitment of Optimal’s consulting and executive management team. We are confident in this team’s ability to take Optimal to the next level.”

Globalization, increased product variance, regulatory compliance and pressure from large-enterprise partners have created environments for midsize organizations that are just as complex as those of large enterprises, according to AMR Research.

Optimal has achieved distinction over the past 13 years for its work on some of the largest SAP sites in the world. The company plans to leverage its strong heritage and proven track record working with large organizations with complex global operations to help middle-market companies with their SAP implementations and growth initiatives, according to Sam Sliman, president of Optimal Solutions.

“The competitive and operational challenges middle-market companies face are not entirely different than those encountered by large, multi-national organizations,” said Sliman, “As an SAP channel partner authorized to resell SAP Business All-in-One, we will help middle-market companies select and implement end-to-end SAP solutions that deliver powerful, measurable results at the lowest possible cost.”

SAP’s Business All-in-One solution is a customizable and extensible solution for midsize companies with deep built-in industry best practices. It is designed for midsize companies with 100 - 2,500 employees, global operations and high transaction volumes.

Gurvendra Suri, founder and chief executive officer of Optimal Solutions, anticipates four-fold growth over the next several years as Optimal drives forward with its expansion into the midmarket for SAP solutions.

“To reach our growth goals and achieve our objective of becoming the dominant, pure-play SAP solutions reseller and consulting firm for midsize companies throughout North America, we will grow our workforce considerably and rapidly over the next several years. Looking forward through 2010, if all goes according to plan, I would expect Optimal’s revenue to quadruple and our global workforce to be in the range of 1,200 to 1,600 worldwide.”

Mr. Suri does not rule out acquisitions as part of the company’s midmarket push. “We will leverage Tailwind Capital’s investment in Optimal to rapidly build out our portfolio of vertically focused SAP Business All-in-One solutions. Acquisitions are also a possibility moving forward if they strategically align with our vertical-market targets and business growth goals,” said Suri.

Ross Wainwright, senior vice president and general manager, field services - North America, SAP America, Inc., welcomed Tailwind’s investment in Optimal and gave a vote of confidence to Optimal and its midmarket expansion plans.

“Optimal is a firm that has time and again proven their ability to deliver for our customers,” said Wainwright. “We enthusiastically welcome Tailwind’s investment in Optimal. This investment will only bolster their capabilities, and we look forward to working with the combined Optimal and Tailwind team to further penetrate the middle-market.”

For all of Optimal’s aggressive and ambitious growth goals, the company’s core value and central mission will remain unchanged according to Mr. Suri. “Excellent service focused on helping our customers realize the full value of their SAP solutions will remain Optimal’s mission. We will achieve our growth goals by helping our middle-market customers achieve theirs.”