SAP executive: Business ByDesign ramp up not imminent

SAP may not heavily push its midmarket SaaS ERP application until late this year or 2010

It's no accident that only a handful of sessions at SAP's upcoming Sapphire conference feature Business ByDesign, the company's entry into on-demand ERP (enterprise resource planning) software for the midmarket, according to a top company official.

"There's not going to be a lot to report out" about the application's status at Sapphire, which takes place May 11-14 in Orlando, said Bill McDermott, an executive board member and president of SAP's global field operations.

"The noise level will increase" toward the latter part of this year, or perhaps not until 2010, he said. "We want to get [Business ByDesign] just right."

SAP first unveiled Business ByDesign in September 2007, and had initially planned to reach US$1 billion in revenue and 10,000 customers for the product by 2010. But in April 2008, the vendor said it would take another year to 18 months to attain that goal.

SAP has been trying to ensure it can turn enough of a profit on Business ByDesign at scale, and that effort is still ongoing, McDermott said.

McDermott's description of the application's current status is not entirely surprising.

SAP executive board member Jim Hagemann Snabe, who oversees development of the company's applications and technology platform, said in a February interview that he wasn't inclined to heavily showcase Business ByDesign at Sapphire if the program wasn't ready for a major rampup.

Still, the continued delay in a full-blown launch of the product has observers like 451 Group analyst China Martens wondering.

"Basically, I still wonder whether SAP will discontinue BBD and fold the technology and what it's learned about SaaS into existing products -- Business One and Business All-in-One," she said via e-mail Thursday. "I think SAP is keeping the door open on BBD, so it can really figure out what it wants and needs to do in the SaaS arena. I still anticipate they will pull back on it entirely and perhaps buy something instead."

SAP is also under less pressure to deliver a full-blown SaaS ERP suite quickly because rivals like Oracle and Microsoft haven't done so yet, she added.

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