SaaS: Will Partners Embrace New SAP Business ByDesign?

Matthew Weinberger

August 3, 2010

3 Min Read
SaaS: Will Partners Embrace New SAP Business ByDesign?

SAP AG has launched feature pack 2.5 for their SaaS-based Business ByDesign business management suite, bringing users features like in-memory analytics, mobile device support, and increased flexibility. It also adds starter packages to help VARs shift customers into SAP’s cloud. But rivals like NetSuite continue to attack SAP’s SaaS and cloud strategy. Here’s the update.

No doubt, the Business ByDesign platform has suffered from several false starts and rollout delays. But during the SAP Sapphire conference (Orlando, May 2010), the software giant promised Business ByDesign would start to gain traction with partners and end-customers. At the same time, SAP’s Kevin Gilroy indicated that the company was regaining momentum with partners and customers.

Now, the Update

Fast forward to the present. SAP says their resellers are key when it comes to Business ByDesign, and so the feature pack is designed to give them a leg up by enabling of partner- and customer-specific business extensions. It also adds the ability to make changes to the default user interface, according to SAP’s press release. And SAP says that by leveraging their life cycle management system, all changes are protected during updates.

As for the cloud starter packages, SAP says available in three flavors: CRM, ERP, and professional service provider (PSP) for businesses with as few as 10 users. The CRM starter package has an implementation price of $13,500 and a per-user cost of $89, with ERP going for $37,500 and $149/user and PSP at $45,000 and $149/user (per month, that is).

Both the SAP Business ByDesign feature update and the starter packs look to make it easier and cheaper to move new customers into the cloud.

Rivals Respond

Whenever SAP makes a move, established and emerging rivals seem to join the conversation. A prime example: NetSuite CEO Zach Nelson claims Business ByDesign has two potential flaws. In an email to The VAR Guy, Nelson writes:

  1. It seems that SAP is bringing their old weaknesses (namely weak customization and static locked down business processes) to the SMB market. It appears that they are delivering the worst of all worlds – a non-customizable solution with weak native verticalization.  As a result, customers are forced to use what SAP defines as best practice, not the way the customer feels is best.

  2. A fixed bid consulting offering defined by SAP is horribly “channel-unfriendly.”  The channel is expert in defining services for customers, so again, it seems like SAP is forcing an unnecessary change in the channel’s business model.

Hmmm… Do Nelson’s claims hold water? The VAR Guy’s team will let readers decide.

Glass Half Full?

Meanwhile, SAP is striving to regain momentum on a number of fronts. The company changed CEOs in February 2010 amid questions about SAP’s enterprise and cloud strategies. More recently, SAP has acquired Sybase — the database provider — and promised an increasingly channel-friendly strategy.

SAP has been growing again, but the company’s most recent quarterly results fell short of Wall Street’s expectations. Oracle claims it continues to win customers away from SAP, but SAP’s Gilroy has pointed to a range of new customer and partner wins.

All that said, will partners embrace SAP’s new Business ByDesign launch? We’ll be watching.

Additional reporting by Joe Panettieri. Sign up for The VAR Guy’s Newsletter, Webcasts and Resource Center. Follow him via RSS, Facebook, and Twitter. Plus, visit

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