It is well documented that in order for SAP to achieve its goal of 100,000 customers by 2010, the midmarket will have to play a large role. Specifically, Business ByDesign (BBD), SAP’s new software as a service (SaaS) offering for the midmarket, will be leaned on heavily to achieve this growth.
In SAP’s earnings press conference today, the company put some numbers to the impact it expects Business ByDesign to have. CEO Henning Kagermann said SAP hopes to grow the Business ByDesign customer base from the current 150 to 1,000 by the end of 2008. Perhaps more surprising, he said that SAP sees 10,000 customers and $1 billion in “revenue potential” for the product by 2010.
Is this realistic? In SAP’s 2007 earnings filing, it reported $182 million in revenue from “subscription and other software related service revenue.” Even if all of that were attributable to Business ByDesign, which it is obviously not, it would represent a 75% compound annual growth rate (CAGR) for BBD revenues to reach $1 billion by the end of 2010.
SAP will be investing €175 – €225 towards the effort in 2008, so it is clear that the company is committed. But it also appears to have its work cut out for it.
SearchSAP.com editorial staff