This is really annoying. AMR reports having seen a demo of A1S at SAPPHIRE. I’ve been yelling at SAP about this all week. AMR is light on detail but one thing caught my eye:
Customers can then buy the software by simply generating a quote based on the number of users and selected functionality.
Uh? In Dan Farber’s and my session with Scott Lutz, Scott was very clear that pricing is per user ONLY and not function dependent. In theory that means a buyer could have the entire ‘suite’ in the browser though that’s highly unlikely.
Per user pricing puts a subtle lock on the buyer because it doesn’t make sense not to get it for everyone. Whether it is worth the price is another matter.
AMR also points out:
SAP will also have to deal with the inevitable demand for A1S from its larger customers. Many of these companies have smaller sites, divisions, and plants that are not running on the centralized SAP business suite. CIOâ€™s may see A1S as an ideal alternative since itâ€™s based on the same technology platform and should be easy to integrate to the corporate system while offering lower maintenance and ease of use.
This â€œinstalled base marketâ€ wonâ€™t generate the sales volume or customer count that SAP is looking for, but it may represent some nice incremental revenue, account expansion, and an instant customer base for A1S.
A number of vendors have successfully adopted a ‘surround’ strategy for groups where SAP is the central incumbent. Microsoft and Sun Systems spring to mind. But it is clear that SAP customers want to have a single throat to choke so the demand from these sources could be high. Having said that, Scott never mentioned this segment so maybe they’re not anticipating demand.
If A1S is as easy to implement as SAP is claiming then replacement could be much easier than in a traditional vendor shift. However, the extent to which it will be possible to migrate coding structures for the central accounting function will be critical. This is something that SAP will need to aggressively demonstrate to get any real traction. AMR thinks this provides partner opportunities. It also means that migration costs will need to be carefully watched.