"We had four objectives in mind when we began development," SAP CEO Henning Kagermann said. "The first was to not compromise on the product; this is a total SAP solution. Second, we wanted to dramatically simplify the user experence. Third, we wanted to reduce costs and, fourth, we wanted to create something that was future-proof, a solution that could be adapted to accomodate our customers' future business needs."
At first impression, SAP Business ByDesign delivers on those promises. SAP spent more than four years and some $300 million building and refining BBD as a complete enterprise solution for companies with 100 to 500 employees that goes well beyond the standard promise of the nascent on-demand market which is to deliver software more cheaply. SAP wisely recognized that cheaper is not a deal closer in the enterprise space--completeness and the potential for competitive advantage are.
Josh Greenbaum, whose opinions on enterprise software I value highly, calls it "one of the most significant enterprise software announcements in recent memory." Certainly, BBD--with its service-oriented, event-driven, open standards architecture--combined with SAP's reputation, will provide a major shot in the arm for the SaaS model.
SAP believes the 100-500 employee market is a unique $15 million niche but its biggest challenge is try to keep BBD from cannibalizing sales of its Business One offering for smaller businesses and it high-end offerings for large enterprises. This may be a problem, some executives privately concede, but it is a success problem because it gets SAP into the SaaS game with a clear market niche and if on-demand becomes the delivery model of the future, they're already there.
SAP Business ByDesign has at least one major social software element--an online user support and e-learning community--that allows users to help each other as well as get company support and training.
SAP says it aims to add 10,000 new customers with BBD by 2010. With a $149 per user per month price, built in service and support, a revolutionary try-it-before-you-buy-it offer and a solution that trumps its competitors on completeness, SAP has clearly transformed the enterprise software landscape.