I just visited the SAP Business ByDesign website as I was curious about the availability and how they price their ‘small business ERP solution”. At January 26th 2011 SAP Business ByDesign is only available in Germany and the USA. This is not really a review, it’s a few observations and thoughts about where the SAP Business ByDesign foray might take the industry.
It came as no suprise that SAP Business ByDesign is expensive. The year one costs including implementation (Go-Live Services) for a ten user (ten employee) business added up to a tear jerking $55,400 (£35,750) which makes it some 13.5 times the cost of our system.
The cost per user of the SAP Business Bydesign system is $149 per month which makes it roughly 5 times as expensive as salesorder.com. So in year 2 you can expect a bill of around $17,880 (£11.920) for ten users. This is roughly 4.5 times the cost of our system.
It’s impossible to make a comparison betweeen SAP Business ByDesign and our system because as you would expect SAP have included hundreds of features and tens of modules. So here is my first note of caution, the higher the number of features (and modules), the higher the consultancy bill of weeks as opposed to days configuring the system to fit your needs. So you should treat the ‘Go-Live’ services fee with appropriate caution.
Which leads me neatly on to the training costs. Any uniquely tailored system of the breadth and complexity of SAP Business ByDesign is going to need customised training which of course will increase your costs.
The much awaited release of SAP Business ByDesign heralds not only the beginning of a new era of enterprise software history, but also endorses the fact that web applications are in the long term going to replace on premise software. Or are they? I’m continually seeing the early software as a service players release ‘on premise’ versions of their software. Am I missing something here? I don’t think so as it’s entirely rational and commercially sensible to avoid disrupting or destroying the ecosystem of partners that software vendors like SAP have invested in so heavily to build, and rely so much upon for revenues and of course marketing.
The interruption of the SaaS direct model has given birth to a climate of mistrust and fear in the vendor centric value added reseller communities. These VAR’s have heavily invested in their hard won customers. VARs can sit and wait for the software vendors like Sage to ‘come clean’ about their cloud strategies – which may never happen or reduce their long term risk by exploring the cloud for ‘the next big thing’. I sense the hunt is on.
No doubt the SaaS vendors are here to stay but just like the other ‘volume’ commercial technology vendors they are going to have to learn and adapt to survive alongside the deeply entrenched solution vendors we all know and love. Given SAP’s intelligence and muscle the Business ByDesign experiment should be watched closely by SaaS vendors regardless of size or ambition.
People – lets be careful out there…
JAN