Kill off Business One and other stupid statements

by admin on May 16, 2007

in General

It’s got to be said and SAP will hate me for it but in light of A1S’s launch, the sooner they kill off BusinessOne the better. Here’s why. In thinking about the upcoming A1S service, SAP wants to pitch it at the 50 user level. That’s a stake in the ground but as I asked Henning Kagermann – what if I’m a 25 person business? What if I don’t need what B1 has to offer but can manage perfectly well with A1S’s pre-built processes? Henning surprised me a little by saying that it isn’t necessarily about size but about required capability. This still creates a problem.

While I don’t expect A1S to be super function rich at launch, I believe it will be fleshed out very quickly. It will have to in order to be credible when compared with other offerings and SAP will have to get used to a rolling quarterly release cycle. In turn, that means there is bound to be significant overlap between A1S and B1. In that 25 person business scenario – and there are a LOT of those companies, there comes a point when B1 doesn’t make economic sense. So who might get in on the act? I’ve alluded to this idea in a post I wrote for ZDNet.

BusinessOne’s go to market strategy is based on a reseller model where the reseller gets a slice of the license fee pie plus the juicier implementation costs. But as we’ve seen, A1S doesn’t have much of an implementation story. Click options here, there and off you go. I’d argue that the pre-sales ‘See’ and ‘Try’ options are more important than than agreeing to buy the service because once you’ve had a bash at it then it’s not really a decision that’s hard to make. It either works for your users or it doesn’t.

That gives SAP resellers a genuine reason to get involved because See/Try is the implementation. Therefore, to be meaningful, an A1S See/Try requires that target customers be prepared to hand over a dataset so they can make a genuine assessment. In turn that means mapping data, coding structures and the like. If you’ve gone that far then as a customer, you’ve already made a significant time and monetary investment. You might even be prepared to work in a multi-tenanted environment rather than the mega-tenant play SAP plans to offer. As an aside, that would help drive down costs.

The only remaining question therefore is how much potential customers are willing to fork over to resellers in order to get a fair Try evaluation period? I doubt it’s a lot but $20-30K doesn’t seem an unreasonable figure to contemplate. That would be attractive to existing B1 resellers because it shortens the sales cycle.

SAP hasn’t figured this out because as Hans-Peter Klaey global head of SME at SAP said and which CEO Henning Kagermann confirmed, they’ve not yet identified the kind of reseller they need for the A1S launch. I’ve got clients who want to see A1S because they recognise the potential. At present, those same clients don’t have a relationship with SAP.

So my question is this – how might SAP engage with that new breed of potential implementer? They didn’t ask for names. And will SAP wake up to the potential and realise that B1 could be rendered irrelevant? They could safe passage themselves by offering a deal to B1 customers.

Some at SAP will think this is mad and I’m sure the industry analysts will be scratching their heads because they’re largely clueless about the SME sector. But it isn’t mad. It’s good business for both SAP and its customers because in my opinion, A1S is going to be much bigger than SAP anticipates. And for that, it will need a ton of implementers. So here’s my final thought.

What happens if small implementation shops out in India, Bulgaria, the US mid-west and elsewhere take an interest? We live in interesting times.

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Philip Woodgate May 16, 2007 at 8:34 am

A1S has the potential to be a sensational offering. SAP deserve significant credit for having the foresight to develop an on demand solution. This approach, once properly developed, should work well for the M in SME.

Logically the perfect implementer would have a hybrid of skills. They would foremost be able to understand the business and improve its business processes. They will have worked in the SME sector and understand its concerns. Finally, they will have technology skills.

The on demand solution takes the focus away from the IT headaches and places it firmly on thinking about the business. Therefore, on paper at least, to get the best out of the system your implementer would have a strong business rather than technology background.

Simon Griffiths May 17, 2007 at 9:13 am

Hi
So I presume you have now seen A1S. Your comments about it, and comparisons to what MSFT and ORCL are doing?
How about a word to SAP that the office in SA also invite bloggers to the SA version of SAPphire :)

Dennis Howlett May 17, 2007 at 10:12 am

Simon – we DIDN'T get a proper demo which was highly annoying. I wrote about that on ZDNet.

From the little I've seen, it would not be fair to draw direct comparisons but I do want to know what they're really doing (as does everyone else methinks.) We've been promised first dibs but I'll believe it when it happens.

I'll bring up the invitation issue with Mike Prosceno who manages that programme. They're looking to expand the programme – that I know – and are looking for suggestions and ways to take it forward so this is good input.

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