SAP announced May 17 that its long-delayed on-demand Business ByDesign application suite is "currently available." But with the next breath company officials said that a more advanced version of the suite with many new features will be released this summer, causing some confusion for market observers.
With the approach of its SapphireNow international user conference, SAP
had been signaling for months that it would be ready to announce the release of
the long-delayed Business ByDesign on-demand enterprise resource planning package
for midsize companies.
But there was marked confusion as the SapphireNow conference convened May 17
in Orlando, Fla., and Frankfurt, Germany, with SAP
emphasizing what prospective customers would find when the company issues a new
release of Business ByDesign sometime in July.
In the meantime, SAP says that Business
ByDesign is officially "currently available" and working at more than 100
"charter client" sites in the United States, Germany, the United Kingdom,
France, China and India.
SAP has been developing and testing
Business ByDesign since 2007. In May 2008 SAP
announced it was slowing
the testing and rollout of Business ByDesign
because the company needed
more time to develop the software-as-a-service package to run efficiently
enough to compete with existing on-demand products.
With its release, SAP officials said
customers will have a choice between running Business ByDesign under a "single-"
or "multi-tenancy" model, which is fundamentally the difference
between running the application as a single instance installation or accessing
the software on the Web along with hundreds or thousands of users from many
different computers at many different locations. Single-tenancy is more like
the one-to-one on-premises application software installations that enterprises
have been using for decades.
Multi-tenancy is an essential requirement for all true on-demand application
services and is a model that has long been implemented by SAP's
prospective on-demand competitors, such as NetSuite and Salesforce.com.
The fact that SAP is coming late to the
market and is chasing long-established on-demand competitors means that SAP
is going to have to make a long-term commitment to making Business ByDesign a
market success, said Shawn Rogers, vice president of research with Enterprise
Management Associates, a market research firm based in Boulder, Colo.
SAP is "certainly going to be meet,
especially around the CRM side, with some
solid competition," including Salesforce.com and others such as NetSuite,
which markets an on-demand enterprise resource management package, Rogers
said.. Both companies will directly compete directly with SAP
in the midsize market.
SAP will also have to be careful about
how it will market Business ByDesign without cannibalizing its existing
on-premises business, including the business it has already established with
small and midsize customers, he said.