SAP Upgrades Business ByDesign, Continues Channel Push With SaaS Apps

SAP is on pace to have 1,000 customers using Business ByDesign by the end of the year, up from 400 in May, said Frank Iannotti, North America vice president for Business ByDesign. And the channel is generating 50 percent of the application suite's sales, he told CRN.

"We're really pushing to build out a healthy ecosystem for Business ByDesign," Iannotti said, noting that SAP now has 100 partners working with the cloud application suite in North America and 250 worldwide. "And that will continue to grow," he said, re-iterating statements by SAP executives that the vendor plans to make the channel the primary route-to-market for Business ByDesign.

The sales figures indicate that SAP is finally gaining market traction with Business ByDesign since it was re-launched in August 2010. The product initially debuted in September 2007, but it was pulled back while the company re-tooled its go-to-market strategy.

"Expectations are extremely high for 2012," Iannotti said of Business ByDesign sales. The on-demand application set is targeted toward small and mid-size customers, including fast-growing small companies that are looking for alternatives to Intuit QuickBooks and similar financial applications. SAP is also pitching Business ByDesign as an alternative to installed ERP applications from such vendors as J.D. Edwards, PeopleSoft and Lawson that have been acquired.

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"Somewhere between 60 and 70 percent of our prospects are interested in Software-as-a-Service applications," said Michael White, a senior consultant at Vision 33, an SAP Gold channel partner in Irvine, Calif. He said Business ByDesign works particularly well within companies with business processes like accounts payable and receivable spread across disparate departments.

The new feature pack for Business ByDesign, which the company is also calling Release 3.0, offers new software development capabilities for solution providers and ISVs to develop custom and vertical-industry software that run with Business ByDesign. Those add-on applications can be sold through SAP's online store. "The best way to think about it is iTunes for SAP ERP," Iannotti said.

The release provides more professional services functionality, including customer contract management, support managed services and enhanced revenue recognition automation.

The ability of Business ByDesign to push reports out to mobile devices "is really powerful," said White at Vision 33. He also praised the new release's streamlined user interface. "It's very crisp and clean," he said. "Very straight-forward and well-organized."

The new release is more tightly integrated with SAP's flagship Business Suite line of on-premise applications to automate procurement processes between a company's headquarters and its subsidiaries. SAP sees such two-tier Business Suite/Business ByDesign implementations as a major market opportunity. A company subsidiary could sell a product using Business ByDesign, for example, but centrally manage inventory using Business Suite applications, Iannotti said.

SAP also has developed "SAP Ideas ByDesign," an online community where customers and partners can provide ideas and requests for improvements in the Business ByDesign cloud applications. "We felt we needed to accelerate the way we were getting feedback from customers," Iannotti said. SAP has promised to deliver a new feature pack for Business ByDesign every six months.