Business ByDesign

Why the wait for Business ByDesign?

Well, the Business ByDesign news is in from a recent SAP event in London with members of SAP’s SME team and the most interesting thing about it is the lack of any new details - or a ship date - for the service analysts once touted as “most comprehensive SaaS ERP offering on the market.”

SAP is “waiting for more guinea pigs” before releasing its SaaS-based ERP system, BusinessWeek reports and there is “still no ship date” for Business ByDesign, according to InformationWeek.

This is the same thing we’ve been hearing since SAP first announced its ambitious plans to develop and Continued »

Report: Business ByDesign delayed

SAP will delay general availability of its Business ByDesign Software as a Service (SaaS) offering, according to German news source Handelsblatt. Given that SAP wanted Business ByDesign to bring in $1 billion a year by 2010, the delay represents a significant setback in SAP’s attempt to win a chunk of the lucrative SaaS market.

ByDesign is already out on a trial basis, but it hasn’t picked up as much traction as expected. At Cebit, SAP revealed that ByDesign had 150 customers. By contrast, SaaS market leader Salesforce.com claims 41,000 customers.

An SAP developer speaking to Handelsblatt claimed (in German) that ByDesign was suffering from performance issues and bugs that would delay general availability until perhaps the end of 2009. That gives Salesforce.com, NetSuite, and other SaaS vendors another eighteen months to keep dominating a market that none of the majors (including SAP, Oracle, and Microsoft) have been able to crack.

Demir Barlas, Site Editor

Aggressive goals for Business ByDesign

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.
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Microsoft itching to fight SAP BBD

If you’re following the developments in the SMB (small and midsize business) space, you’ve probably heard about the latest Microsoft move. MS Dynamics Entrepreneur Solution is a new, fully Office-integrated suite aimed at the really small fry. Sage and Intuit are the primary targets for this particular release, and so far the release is limited to the Netherlands, but it’s another little step towards the SAP vs. Microsoft showdown we’ve talked about in the past.

SAP is betting the hard on the SMB market, but Microsoft certainly isn’t about to stand down. Indeed, Microsoft Business Solutions head Kirill Tatarinov recently told Reuters that he’s eager to meet SAP’s new Business ByDesign in the field.

“There are many organizations that may not use Dynamics just yet, but many are already using the infrastructure that Dynamics is built on,” Tatarinov said.

What makes this battle for the SMB space so interesting is the different strengths of the key players. Microsoft has a strong channel and beach heads everywhere, while SAP is (generally) technically solid. Oracle’s fierceness in and of itself goes a long way, and the smaller niche players have the advantage of specialization in their respective fields — which, in combination with their inherent nimbleness, may help keep the big bullies from stealing their lunch money. Here’s to an interesting 2008!

Matt Danielsson
Editor

A1S is now SAP Business ByDesign

Say goodbye to “A1S.” It is now called SAP Business ByDesign.

CEO Henning Kagermann kicked off the much-anticipated, whirl-wind event with an almost-cameo 10-minute keynote.

“It is the most important announcement of my career I’m making today,” the not-usually-prone-to-hyperbole Kagermann announced to a packed Nokia Theatre in Manhattan.

Some details we’ve learned so far:

• Pricing will be $149 per user per month for a minimum of 25 users per company. A value pack-type option of a limited version will be offered at $54 for a set of five users.
• Designed to slot in between Business One and All-in-One in companies with 100-500 users.
• The product is currently in the pilot customer stage in the US.
• For more information, SAP set up a Website at www.sap.com

Peter Zencke, an SAP board member kicked off his portion of the program by echoing the thoughts of many in the room: “Yes it was a journey.”

In fact, the real meat of the event should be Zencke’s keynote which promises to have “product demonstrations.” We brought our digital camera, so if lighting allows, we’ll have some screen shots.

Then it’s on to the customer panel, which is scheduled to run for all of 20 minutes before Léo Apotheker’s 10 minute keynote.

If no big news breaks, we’ll plan on posting later today with a wrap-up of the customer panel, Zenke and Apotheker’s thoughts, and said screen shots.

Jon Franke
News Editor