By samdizzy

SAP Business ByDesign — an emerging SaaS platform — hit significant bumps when it debuted in 2007. But a July 2010 relaunch has caught on with some channel partners. Looking ahead, SAP is preparing a software development kit (SDK) and an App Store to ensure Business ByDesign attracts more customers and partners, according to Doug Merritt, SAP’s executive VP of on demand solutions. Where exactly will partners fit into the equation?

In a TalkinCloud FastChat Video interview, Merritt said VARs and other channel partners currently represent about 40 percent of Business ByDesign’s revenues. But over the long haul, “the business model calls for eventually up to 80 or 90 percent of revenue coming from the partner channel,” said Merritt. Ideally, he added, SAP people will not be involved other than working behind the scenes with partners. “That’s a big departure from SAP.”

Basic Definition

So what exactly is Business ByDesign? Merritt calls it as a SaaS platform for companies with roughly 50 to 500 employees. The system addresses finance, HR, sales, marketing, logistics, distribution — “all the core elements that the majority of companies out there need to run their business,” said Merritt. “But it’s hosted in the cloud.”

Admittedly, partners made more initial money selling traditional on-premise ERP solutions. However, Merritt added, Business ByDesign presents consulting opportunities to partners who want to help end-customers with business processes. “The economics take longer to pay back [for partners],” conceded Merritt.

Still, the recurring revenues offer predictable annuities, he added. Plus, to open up additional partner opportunities, SAP is preparing a software development kit — based on C# (pronounced C Sharp), the general purpose, object oriented programming language. Also, a Business ByDesign App Store is on the way sometime in 2011.

Competition Looms

Merritt sure sounds upbeat. But competition looms.

Still, SAP Business ByDemand seems to be catching on with some channel partners. One prime example: Skyytek Corp., a SaaS ERP pure-play consulting firm that previously worked with NetSuite, has joined the Business ByDesign partner ranks, according to a December 2010 press announcement.

No doubt, Business ByDesign’s 2007 launch was marred by technical glitches and business model question marks. But Merritt sure sounded confident each time he answered our partner program questions. We’ll be sure to keep tabs on Business ByDesign to see if SAP gains ground on pure-play SaaS specialists like NetSuite and Salesforce.com.

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