SAP has long been associated with complexity and high end software, but as the IT industry reboots around hosted Software as a Service models (SaaS), the German software giant sees an opportunity not just a threat. Salesforce.com has changed the game, but that doesn’t mean SAP can’t play under the new rules.
The result – BusinessByDesign- an end to end business application suite, designed from the ground up to be hosted. The goal – delivering SAP business application functionality to smaller businesses at around a tenth of the cost of its more traditional on premises software. The suite is specifically designed to not be customised. It also shows SAP in horizontal, rather than vertical mode.
SAP now has a portfolio with multiple entry points for customers.
SAP Business Suite greater than 2,500 employees
SAP Business All in One less than 2,500 employees
SAP BusinessByDesign 100-500 employees
SAP BusinessOne <100 employees
Jason sees portfolio overlap issues.
SAP is expecting 10k customers a year to be coming online from 2010. That is some serious growth. Maybe investors will be excited after all, Dennis. In fact for the business to be sustainable SAP has to sell that many seats. Its a lower margin business model.
The Concept Car approach
SAP designed to build from the ground up – to create a “concept car”. Software development for the suite was model based, running on NetWeaver. All componentry is isolated with message-based integration. SOA meets SaaS.
It seems to me that SAP still needs to get over its Not Invented Here mentality though. It built its own tools for AJAX support on the front end, for example, rather than looking to open technologies such as the Dojo toolkit. Even Apple takes advantage of open source and other people’s technology in its products, even if it hides them well…
But then like Apple, as far as SAP is concerned black boxes are ok. Its all about interfaces, not code and implementation details. Frankly, much like Apple, SAP doesn’t want third parties to build on the platform. It needs to closely control the environment to offer the right quality of service to customers. Whatever the eventual channel model- QoS will be key to BusinessByDesign success. No customisation. No platform choice. Just application services.
Or at least that was how I understood it initially. During the launch announcement it became clear that customisation may still be a big part of the BusinessByDesign story. [I need to dig into this. more later.]
Built in analytics- SAP is not going to be selling any Oracle database licenses this time around. But then again, some SAP partners, let alone competitors, may be a little uncomfortable with SAP as a hosted model. IBM’s iSeries business, for example, could see a material impact.
iSeries is an interesting platform to look at, because the target customer for BusinessByDesign is exactly the kind of shop that would traditionally buy a packaged application running on an AS/400. The kind of customer that would forget about its server and put it behind a drywall…
BusinessByDesign will effectively offer Master Data Management for SMBs out of the box. I was surprised it wasn’t positioned thus.
One interesting approach is to drive Community collaboration as a core element of the platform. SAP could learn from Spiceworks here. SAP would like to customers to help each other with tech support and business issues, which will lower its own costs. SAP also plans to minimise training cost with online help and user community interaction.
The UI represents a missed opportunity, in my opinion and shows how SAP’s Not Invented Here approach can cause problems for the firm. I kept wondering where is the real AJAXy goodness? Hitting F5 repeatedly is hardly the key to few clicks.
i was surprised to see a search for a particular report require the user to hit the search button. Why not just have interaction between front and back end, and pop up the report names as the user types? Frankly I would love to work with SAP on this- it could take a lot of clicks out of the system.
To be fair the drag and drop modeling looks pretty solid and the ability to step back and look at all of the processes a business is using is quite interesting.
One customer said they had budgeted far higher to retool their IT infrastructure before they came across the product. Once he had gotten over the concern about outsourcing key functions they were able to deploy a “tremendous amount of capital to other areas”. Very happy alpha customers.
One classic moment came when a customer explained that he first considered BusinessByDesign when an SAP executive acquired a plane from them!
SAP has 20 customers live so far, and there were 40 in the pilot.
Final Note to SAP: Take a look at Zimbra‘s demo and borrow from it. There is on need to open new browser windows all the time. Punching through contexts within one pane of glass makes apps powerful.