SAP Business ByDesign attracts Sage, Infor partners

German software vendor SAP AG (NYSE: SAP) has released version 3.0 of Business ByDesign, its on-demand enterprise resource planning (ERP) software, with functionality that, according to an exec, gives the company a greater foothold in the services industry.

“We now see service industries as a very big play for SAP,” said Frank Iannotti, vice-president for North American operations with SAP.

For those companies that either implement a solution or offer a service, such as a software-as-a-service business, handling something like customer billing is quite different from a company that sells on-premise software.

Therefore, the two new feature packs include new services-specific capability, such as customer contract management and support managed services, as well as improved automation for revenue recognition.

Iannotti said that while SAP has been known for dealing with large complex projects for industries such as manufacturing and oil and gas, these new services-specific capabilities “gives us the best of both” in terms of being easier and faster to deploy for the less complex requirements of services customers.

Iannotti said the company is continuing to build out the partner channel in Canada through which to push Business ByDesign. Currently, there are 250 partners globally with 100 of those in North America. Given that on-demand business model is markedly different when dealing with implementation cost points and revenue, Iannotti expects some partners will struggle to adapt. However, he added that 60 to 70 per cent of new partners to SAP were recruited from the likes of Sage and Infor presumably attracted to the software-as-a-service offering.

Version 3.0 also furthers SAP’s move to better cater to smaller subsidiary customers who may be plagued by cost or bandwidth limitations and cannot justify buying SAP’s Business Suite. The release has a new integration scenario for a “crystal clear view” of inventory, which ties back to the Business Suite, said Iannotti.

Other improvements to the core product include support for Windows Phone 7 so end user get access to Business ByDesign features, such as reporting, when working on a mobile device.

Business ByDesign became available in Canada last February after version 2.5 was already released in other countries in July 2010. At that point, there were 250 customers using the software, which now has increased to 400. Originally launched in beta in 2007, Business ByDesign’s general availability was hindered by problems of scalability and multi-tenancy. But the company now says the new target of 1,000 users by end of 2011 remains on track.

Nigel Wallis, research director for application solutions with Toronto-based IDC Canada Ltd., said the approach SAP has taken to building version 3.0 of Business ByDesign shows a significant change in corporate culture where the enhancements are customer suggestions, and “are not imposed on customers.”

SAP, said Wallis, is adapting to the expectations of the on-demand market where fast iterations are a must. “In the faster cloud world, the expectation is customers are going to be able to upgrade all the time,” he said.

Wallis said SAP’s desire to make itself “the new suite for all your needs” is a good vision but will be a tough sell in the short to medium term. “It’s a lot of R&D investment they’ve put into it and they need to be able to show there’s a pay off to get clients on board,” said Wallis.

The enhancements in version 3.0 are borne out of customer and partner feedback globally. Futhering this, SAP is now extending a pilot feedback program, originally available only for German-speaking countries during the first half of 2011, now for English users. A Chinese version of the program will be available later in the year.

Follow Kathleen Lau on Twitter: @KathleenLau.

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