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SAP: An ERP system according to the SaaS model - not imagination

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19.05.10, 09:54, Msk

SAP claims that the ERP system "on demand" for SMB – Business ByDesign – "is not imagination", it is a real product. The solution will be available in July of the current year in Germany, the USA, Great Britain, France, China and India. At the same time not gained income, and the number of the users working with a system will be criterion of success of the application.

Originally SAP was going to have 10,000 clients and 1 billion dollars of income from the Business ByDesign system in 2010. However in 2008 taking into account notes of the companies participating in early testing of the solution in SAP came to a conclusion about need to postpone wide circulation of a system in the market of SMB. Today only 100 clients use this application.

Now in SAP say that the necessary works on completion of a product are completed. SAP Business ByDesign of version 2.5 will be provided "in lease" that will allow to cut down equipment expenses and will simplify system management for the developer, including, updating of a system which can be executed at the same time for many users. A system can be available also in classical option, but at higher price. Information on system cost is not disclosed yet.

One of the biggest problems for SAP Business ByDesign is positioning: how can the application attract the clients using "traditional" version of solutions SAP Business One and SAP Business All-in-One?

As the official version of SAP, Business One says it is intended for the companies having from 10 to 100 employees. Automation of a certain level of business processes is necessary for such companies, for example, such as registration of the order, however they have no need for expanded planning and algorithms on resource allocation. The SAP Business One system most is suitable for such companies.

The solution Business All-in-One is relevant for the companies having from 1000 to 2500 employees. This system allows the companies to manage difficult business processes, to solve a full range of managerial tasks.

Thus, the SAP solution Business ByDesign is focused on the companies with staff from 100 to 1000 people. Such companies quickly grow and most need business process automation without considerable costs for IT. At the same time they want to receive the application having response time same as at the "traditional" application. SAP aims to meet this requirement. To users of SAP Business ByDesign should expect the average time of reaction of a system 1.2 seconds.

SAP does not use the gained income from this application as criterion of success of Business ByDesign any more. According to Jim Hagmann Snabe (Jim Hagemann Snabe), the co-CEO of SAP, the company measures success of the application by number of the users working with this software. Besides, now still too early to do the forecast concerning growth of the customer base.

According to Chin Martens (China Martens), the analyst of 451 Group, SAP should be more aggressive if she hopes to receive new clients of SAP Business ByDesign, and to consider that such strong competitors as Salesforce.com and NetSuite work at the SaaS market.