The last couple of years, SAP BusinessOne has not had the best of press. In the UK at least, take up has been poor. When you look at the absolute customer numbers: 360 UK, 4,900 in EU (except Germany, Austria, Switzerland and Benelux – 7,400 including these territories) and 10,600 customers worldwide total the you’d be forgiven for thinking SAP is making a token play. Especially as there are some 500 resellers in the non-GASB part of the EU. That would be both right and wrong.
SAP has struggled to find a way into the SMB market, largely because the first iteration didn’t match market expectations. Neither did the company have the right approach. That’s changing. Cathy Daum, VP for B1 EMEA, told me SAP is creating fresh partner education, growing certification programmes, opportunity qualification tools and fleshing out an ISV solution partner exchange. Growth in the last year was 40% (from an admittedly low base) and SAP expects this year’s growth to be 150% of market rate.
SAP is going after what it knows is a highly fragmented market which includes Microsoft, Sage, OpenAccounts, Access, Hansa and a bunch of others. Where it is hoping to differentiate is in its end-to-end play.
As a product offering, I position SAP as a manufacturing, wholesale distribution and logistics player for the mid-range. I define the mid-range as companies with turnover £30-150 million, up to 150 employees. Jyoti Banerjee might disagree with my end points but that would be a matter of detail rather than argument. Although SAP has some service industry penetration, with 30% sales from this sector, it relies on partners for things like time and expense plus project management. It is not, therefore a well defined service industry play today. If it is to achieve market dominance, service industry specifics need to be addressed.
BusinessOne is currently on-premise but it has recently added e-commerce and web-based CRM via acquisitions. Speaking with Gadi Shamia, SVP solution management for small business, I got the impression that by 2008(ish) timeframe, B1 will move to a services based architecture so that customers can take a hybrid, on-premise or services approach. That’s welcome and fits well with how I see applications morphing over time.
I asked about ASP/SaaS but the response was disappointing: “We’ll respond to customer demand but this group doesn’t make change very often.” Sorry – customers buy what they’re sold in this market. They trust and rely upon resellers who have a vested interest in selling hardware based solutions. I’m of the view this is a self-interest issue that will be exposed for what it is but it will take time and the persistance of people like myself, Phil Wainewright and others to show how flawed the innovation free, on-premise argument is in a networked world. If SAP chose, it could attract that mindshare for itself and show that it is back to being the innovator it once was. So what’s the big upside?
SAP can rightly claim it is the only vendor at this time to offer a (near) complete, end-to-end, process driven solution for its target market. E-commerce is sophisticated enough to handle returns and can be set to create POs if there are stock outs plus operate in both B2C and B2B markets.
It has Outlook integration which can synchronise to the internal B1 diary but doesn’t have native mobile (partner add-in required.) Three different types of reporting offer significant flexibility and its ‘drag and relate’ feature is especially cool for execs. But – I find reporting looks a tad ugly so while there is an Excel add-in I’d like to see this part of the offering smartened up and made to look a lot slicker. Resellers will address this in the short term but as I’ve argued before, reporting cannot be an afterthought.
The problem I have with B1 is that I expect more, largely because of who they are and their capacity to do better. I’d like to see native HR. B1 CRM is really SFA plus field service and what I want is more customer interaction stuff so I can do marketing and demand planning. MRP is there but there’s no real supply chain management which, if they’re to take this forward and specifically sell into SAP R/3 satellite companies has to be part of the core. SAP will argue there is enough in logistics/warehousing to satisfy the market. OK – but with so much on offer, it doesn’t take a rocket scientist to work out that demand management will become an issue.
I also want to see SAP rapidly move into vertical markets. Healthcare and construction are two that would benefit enormously from B1 – but only with development work. At present they’re served by specialists whose offerings suck. To give credit, SAP is localised for 40+ countries, something other vendors would struggle to achieve. If they make B1 fully web-based, combine that with localised versions then it will be a tremendous benefit for those many small, project based companies that send teams around the world. Which also fits with the trend towards ‘small is the new big.’
SAP has the resources to capture a good share of the SMB market I’ve defined. But its strategy isn’t 100% there. I worry it is taking a retro-active approach to web services and encourage it to push full steam ahead on things like RSS and XML. e-commerce and web-based CRM help significantly. And as Gadia says: “People will look to technology change when they take on functions like e-commerce.” Have they got the story right? Time will tell, but at present it is what I would describe as a ‘safe’ rather than ‘innovative’ option.
If you currently consult on mid-range applications then I’d recommend taking a look. B1 won’t take you out of your comfort zone so you won’t get burnt. At present, SAP is in listening mode so now’s the chance to influence the way B1 goes forward.
Technorati Tags: SaaS, SAP Business One
