SAP Scales Back Business ByDesign Development Efforts

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The change in direction is also driven by a move in May to centralize SAP's research and development operations under Vishal Sikka, a member of SAP's executive board, and head of technology and innovation.

Sikka proposed development of the HANA-based cloud application platform that will pull together core database server, application server and messaging middleware technology in one platform. The system also will include basic application functions such as currency conversions that Zinow said could be used by SAP's own developers and independent software vendors.

But Zinow said SAP doesn't have the research and development resources for that project and full-scale development of Business ByDesign, leading to the decision to scale back development of the latter.

About 1,000 businesses, ranging from 10 employees to 9,900 users, currently subscribe to the Business ByDesign service, Zinow said. Another 100 or so large corporations are using the cloud application set for use within their subsidiaries.

Business ByDesign is most popular among professional services companies, which Zinow said account for roughly 40 percent of its customer base. SAP will focus its Business ByDesign development efforts on that area going forward, he said.

Pearson at Contax praised Business ByDesign's capabilities and design, and he said his company would continue to offer it as an option. "We just haven't seen any [customers] that are a good fit for Business ByDesign," he said, adding that it doesn't have the features and configuration options of the more established Business All-in-One. Contax also sells SAP's cloud-based CRM and human capital management applications that are complementary to Business All-in-One, whereas those applications overlap with Business ByDesign's functionality.

Zinow said the first phase of the HANA-based platform, an application configuration engine, should be ready in about six months. He declined to provide a timetable for additional components of the platform.

The channel accounts for about 80 percent of Business ByDesign sales worldwide, Zinow said, with that number higher in Europe and, perhaps, closer to 70 percent in North America. There are about 200 solution providers working with Business ByDesign, he said.

About 120 of the 200 solution providers who work with the product develop add-on applications for the application suite, about 680 at last count. Zinow, for example, said he had just spoken with a partner who built a planned maintenance application for the wind power generation industry on top of Business ByDesign.

This, week NetSuite, one of SAP's archrivals, announced a deal to acquire TribeHR, a developer of cloud-based human capital management applications. The company said it would use the acquisition to create an integrated ERP and HCM application suite for small and midsize businesses -- the same market SAP has targeted with Business ByDesign.

NetSuite has already begun offering a "SAP Business ByDesign Sunset Migration Program," under which users of the SAP product can get a free one-year subscription to NetSuite's cloud applications and free data migration services.


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