SAP Business ByDesign Is Live, for Better or Worse

SAP has finally wedded itself to on-demand software. It's been an expensive, hard-to-plan affair--now the hard work begins.

to Applications |
On July 30, 2010, SAP made "generally available" its SAP Business ByDesign (ByD) on-demand software suite to customers in China, France, Germany, India, the United Kingdom and the United States. The announcement lived up to SAP executives' promises of making ByD GA by July—though it seems like they waited until the 11th hour.

For those of us who have followed the travails of SAP's fledgling on-demand suite of ERP apps, the news of its release resembled the build-up that surrounds a wedding: All the hopes, angst, emotions, turmoil and expectations along the way lead to a final day that, for better or worse, is just a wedding ceremony of two people surrounded by an assortment of watchers—some interested, some just wondering if there's an open bar at the reception.

The whole thing goes by in a flash for the newly christened Mr. and Mrs. Doe.

The day after the nuptials, however, is when most people involved inevitably wonder: What did we get so worked up for? Because when you think about it, the wedding itself was certainly not the most critical part of a couple's journey. It was a step. It's what happens next that will be most important. How will the couple deal with the unknowable "sicknesses and health" that lie in wait? Will their expectations of married life synch up? Who will do the majority of the laundry?

For SAP's executives, ByD will surely test the union of the software suite and those SAP partners deploying and hosting the new software; it will gauge SAP's ability to be faithful to a single market not as lucrative at its enterprise-class customer base; and it will put pressure on the SAP sales force's ability to lure back customers who were turned off by ByD's long gestation.

Naturally, there will be a brief honeymoon between SAP and its SMB customers-- but how will those customers respond (and SAP adjust) if and when things turn sour?

Like most marriages, this isn't going to be an easy ride for SAP as it faces new market and marketing realities.

Now while it's impolite to ask how much a couple spends on a wedding, SAP took a novel step with its ByD software pricing: It publicly listed ByD fixed implementation prices as well as subscription prices on a per-user basis. For instance, SAP claims the "starter" ERP package can be implemented in roughly six weeks or less with a fixed implementation price of $37,500 and a subscription price of $149 per user. SAP lists starter packages for CRM and business process management apps as well.

You can't put a price on happiness, but for many mid-sized businesses that want to run SAP, those numbers will be a welcome sight. (For smaller businesses with tight IT budgets and fewer users, those numbers might be a bit too gaudy.)

It's interesting that SAP has chosen the word "starter" to wrap around its ByD suite offerings. It immediately made me think of the crude "starter wife" analogy: That a newly successful husband, tired of the first wife, will drop her and go get a new and younger version when the time is right.

Enjoy this honeymoon period, SAP. Who knows just how long the ByD bliss will last?

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