Two years after the high-profile launch of its first broad-based software-as-a-service enterprise software product, SAP AG has yet to pull the trigger on a general rollout of Business ByDesign and will not do so until sometime next year, company officials say.
Still, SAP officials say the company made the correct decision in May 2008, when it announced it would scale back the BBD rollout in order to fix problems with the service, many of them related to how SAP could reduce the cost of provisioning and upgrading the product.
“It was a good decision,” said Jeff Stiles, SAP’s senior vice president for SME marketing, in an interview with Managing Automation. “It was clear, particularly in this economic environment, that if we had scaled to volume too quickly, it could have negatively impacted our [profit] margins.”
When SAP formally launched Business ByDesign on Sept. 19, 2007, at a flashy New York press event, officials said the company’s goal was for the service to have 10,000 customers and to generate €1 billion in revenue by 2010.
Eight months later, however, the company announced it would moderate the rollout to fix problems. In addition to improving self-service provisioning and upgrades, SAP said at the time that it needed to resolve some online performance problems.
At the time of the BBD launch, SAP said 40 customers were testing the service, and 20 of those were live with the product. Today, Stiles said, more than 90 have some experience with BBD, with over half of those having gone live with broad functionality. About half of BBD’s early users are manufacturing companies. The company continues to limit BBD deployments to six geographic markets: the United States, the United Kingdom, China, France, India, and Germany.
In the two years since BBD’s launch — and 16 months since its rollout was slowed — SAP has been working to make provisioning and upgrading of the SaaS service more automated and less expensive. The company has also been working to make it easier for partners to create add-on applications that integrate smoothly with BBD, Stiles said.
SAP has also been pouring resources into expanding BBD’s core application functionality. Last month, SAP released the first major BBD upgrade, feature pack 2.0, which boosted overall functionality by about 30% and included several new features for manufacturers. Among them was a strategic procurement feature that automatically generates requests for quotation. The BBD feature pack 2.0 also includes integrated product engineering and quality management tools, as well as enhanced reporting tools.
Early BBD users say they are pleased with the feature pack 2.0 enhancements and remain convinced that, despite the rollout delays, SAP remains committed to BBD and the SaaS business model.
SAP’s decision to moderate the BBD rollout “told me that they weren’t going to get ahead of themselves, and they weren’t going to try to sell vapor,” said Sina Moatamed, chief technology officer at BendPak/Ranger Inc., a $60 million manufacturer of lifts, air compressors, and other automotive service equipment.