If it works, the effort could pay off for SAP in a big way, according to analysts.
"Three out of four customers I spoke with said using Business ByDesign gave them a competitive advantage. If that is sustainable that is a huge differentiator in on demand," said Josh Greenbaum, principal of Enterprise Applications Consulting. "On demand now is really not, in most cases, about a distinct competitive advantage. Its about low cost, a level playing field or a stop gap. But it doesnt bring you up a notch."
During the keynote and demonstrations unveiling Business ByDesign SAP talked a lot about what the suite can do for users, but stayed light on actual technical details. Whats clear at this point is that the suite is built on NetWeaver, SAPs integration platform, to enable the composition and integration of services, which is the way the applications are served up.
Surprisingly, SAP has taken the core of its Max DB database back from the open source world and is utilizing that as the underlying database for the suite. About half the suite also utilizes SAPs in-memory database, called T-Rex internally, to enable faster queries and processing. Zenke said it is SAPs plans to extend the technologys use.
Read more here about why SAP application skills are in demand.
The software itself is designed around four key principals: completeness, ease of use, adaptability and lower TCO. The cost is $149 per user, per month with a minimum of 25 users. A $54 per month per user price is available for up to five users—a plan designed for companies looking to access limited portions of the suite.
One thing hasnt changed with SAPs model: its taking its time releasing Business ByDesign. The software is released now to 20 beta customers and will be released to an additional 20 more the remainder of this year. Leo Apotheker, SAPs Deputy CEO, said there are more than 40 in the pipeline.
To distribute the software SAP will utilize a channel model, relying on partners to sell and configure the software for customers. "Partners will generate money from working on top of SAP," said Apotheker, "whereas we will receive royalty payments. We are validating the model throughout the rest of the year."
Apotheker said later in an interview with eWEEK that SAP has about 2,500 channel partners now that sell its on premise software geared toward the small and mid-sized business market.
While some critics have said that SAP has cobbled together an on demand offering to respond to market pressures, primarily the success of Salesforce.com, which provides not only on demand CRM software, but a development platform as well. Kagermann, during his keynote, said the reason for SAPs timing with Business ByDesign is "obvious."
"There are trends in globalization, a digital revolution, a new world of business. Deeply integrated vertical [software] is replaced by [integrated processes]. Networks are key. On the other side people work in more collaborative teams," said Kagermann.
"The key point is that this will require a change in architecture. We wanted to bring the technical advantages of SOA. Thats why we want to deliver this modern architecture to all our customers."
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