Enterprise Technology Blog

(Readers of the Enterprise Technology Blog know we’ve spent a fair amount of time on the subjects of SAP Business ByDesign and SaaS. Use the category list to access previous posts and podcasts.)

Since it announced a delay in the general release of SAP Business ByDesign, the software leader has been bombarded by questions about its ability to succeed in the world of SaaS and to penetrate the SME market space. I’ve read several blogs that have used the occasion of SAP’s announcement to declare its initiative null and void and that any further efforts to expand into the SME space will be met with a similar fate. What many don’t understand, and what SAP has had difficulty communicating, is that the majority of their customers are SME customers.

To understand SAP’s SME strategy you need to understand the role played by each of its three midmarket - SAP Business One, SAP Business All-in-One and SAP Business ByDesign.

I’ve seen a few summaries, but none as good as this by Simon Jacobson of AMR Research. In it, Simon explores SAP’s three product approach to the SME space and places each of the three into their proper perspective. Simon salutes the “partner ecosystem” SAP has developed (an area we explored in earlier podcasts) as a means of bringing its products to market and rightly states that it needs to continue to play an important role if SAP is to continue its midmarket expansion.

In the end, Simon came to two clear conclusions:

1. Business One and Business All-in-One continue to perform well, and we [AMR] expect them to continue to gain market share.
2. Business ByDesign will eventually sort its kinks out and will gain volume.

Creating an enterprise-wide on-demand software suite is a daunting and gutsy project. One in which successes and set-backs will be many.  Few software publishers have the resources to succeed, but SAP must be placed among the few.