SAP's Business ByDesign SaaS Solution

Consider this post a shout-out endorsement to SAP for their Business ByDesign (formerly known as A1S) announcement. As I've seen nothing more than a few selectively chosen screen shots, I can't yet endorse the product, however, I commend SAP for finally embracing SaaS in the ERP software market with a purpose built thin-client hosted solution --- something arch rivals Oracle and Microsoft have failed to do.

Business ByDesign compliments the existing Business One, Business All-in-One and SAP Business Suite (R/3) products. Business One is limited to the small business segment. Business All-in-One is intended for midrange companies that require industry-specific capabilities (or what SAP calls micro-verticals).

The technology is not exactly my favorite. Business ByDesign is purportedly using the NetWeaver development environment, SAP's MaxDB open source database and Unix. I don't care for NetWeaver and MaxDB as they are proprietary to SAP and I really don't have the time or energy to learn yet more technical skills that only relate to a single vendor.

The early scoop is that the product is relatively weak (compared to much smaller competitors NetSuite and Aplicor who got a much bigger head start), however, fairly priced $149.00 per user per month with a minimum 25 users) and positioned for growth. While the product roll-out looks as though it won't be ready for prime time until late in 2008, SAP estimates that there are 1.5 million SME (small and midsize business) prospects in the 100 to 500 employee range (with 60,000 in the US and Germany alone) and has outlined an aggressive goal of acquiring 10,000 new customers and $1 billion by 2010.

Posted by: Jeffrey on 09.20.07
Posted in: Raves, SAP
Comments (4) | jeffrey[at]erpblogger.com
Trackback | http://www.erpblogger.com/sap-business-bydesign.htm

Reader Comments

I'm extremely skeptical about SAP entering the software as a service market. Unfortunately for SAP, on-demand software cannibalizes their bread and butter on-premise software revenues. I also don't trust software manufacturers that announce new products more than two years ahead of their delivery and in fact suspect that the on-demand erp system will never be delivered. In an article titled SAP Business ByDesign goes back to the drawing board, SAP's own CEO admits that at a time when the hosted software product in incurring big time go-to-market technical problems, SAP is dramatically cutting the staffing and budget for this product. It's only a matter of time before SAP either acquires a legitimate SaaS ERP system or completely vacates the space.
- Posted by Peter J on 05.01.2008

You bring up some valid points being echoed by analysts and the ERP industry at large. All I can say is that there is much speculation and only time will tell.
- Posted by Jeffrey on 05.01.2008

Dude - you're rave of SAP's on-demand ERP system should turn to a rant. SAP is so late to the party I don't think they could ever catch up. After the German giant announced the hosted ERP system at least a year early, it now turns out that the product is unstable (excessive bugs), extremely unimpressive, competitively disadvantaged when compared to the purpose built hosted software systems and is going to be at least another year and a half late. Business Bydesign now looks like a 2009 or 2010 delivery - if it comes at all. It would seem Marc Benioff's ridiculing of SAP's Hasso Plattner last month was on the money and SAP will likely never have a competitive on-demand ERP software system.
- Posted by Michael P on 04.29.2008

That's a bit of a harsh opinion, however, your thoughts seem quite accurate. I suspect if SAP enters the hosted ERP software market at all, it will be with a yet to be acquired product - who knows, maybe even salesforce.com.
- Posted by Jeffrey on 04.29.2008