Is 2011 the year of SAP Business ByDesign for SMB's ? - We think so!

After  general release during the mid part of 2010 and the subsequent hiring of a quality partners in Q4 2010 ( including Skyytek !) - SAP Business ByDesign, an on-demand ERP offering for the SMB space, seems poised to take 2011 by storm. 

First off, SAP Business ByDesign will be a first port of call for larger companies that are running SAP products and want a low cost on-demand solution to run their subsidiaries.   SAP is huge in this arena with many marquee clients and it stands to reason that these clients will remain in the SAP ecosystem.   This will be a huge play for SAP Business ByDesign and certainly give SAP Business ByDesign the credibility (for such a new product) it deserves in the eyes of SMB's.

Second, and as quoted by Dennis Howlett ( @dahowlett), a popular (and independent ) industry expert in the on-demand ERP space (ref: Cloud economics - the bit they don't tell you ),

Why not consider a full suite offering? The only one that ticks all the major departmental boxes in a meaningful way is SAP Business ByDesign. I have an extensive, co-authored report coming out at the end of the month that talks about this solution. It is not for everyone though it does fit the small – i.e. 10-50 person businesses reasonably well. At $149/user/month for all you can eat you might think that it’s a done deal. But even here we find gaps. Some will be filled by SAP over time, others will come from partners. SAP reckons they will do 10% while partners will do the other 90%. Regardless, it all adds to cost.

Not only is this an interesting article - many of the points we agree on.  But it also  highlights the very reason why SMB's are migrating the the cloud en-mass.   SMB's are finally realizing the cloud is really their best option - even with the bits cloud vendors do not tell you! - and it so happens, according to Dennis, that SAP Business ByDesign "covers most departmental boxes" - which means that you have one common interface performing at least 80-90% of all your business functions including CRM, HR, MRP and ERP.  All for $149/user/month.  

Having said that, and further illustrated by Dennis; "SAP reckons they will do 10% [new development] while partners will do the other 90%" - in our opinion, this is acceptable and does add to cost of course; however, it all depends on the distribution and focus of these %'s.   Skyytek is hoping (and some what assured ) that SAP will spend most of their time rounding out gaps in basic horizontal business functions - universal to all businesses - versus specialized vertical functions unique to a specific sub-industry category.  If thats the focus - then there should be no issues of cost.

Third, another interesting article by Dennis (ref: SAP points to record Q4 results ):

Business ByDesign is doing better than SAP expected or wants. In some senses it is still trying to keep the solution in controlled release. Fact is I am fielding questions from VARs and SIs wanting to know more. If SAP plays its cards well, then 2011 will be a surprise to them on this front.

As  far as Skyytek can tell ( based on our own SAP Business ByDesign sales in December 2010 ) - SAP Business ByDesign is performing well across the board; which translates to the fact that it is having better than expected adoption in the SMB space.   This is encouraging for such a new product and if the momentum continues, 2011 will be a blistering year. 

What is even more interesting here is that all Skyytek sales were outside the SAP ecosystem - in other words, customers that were not using any SAP products before.  

So maybe SAP is starting to shed its reputation ( in the eyes of customers) of only selling to large enterprises who can afford their products ?. 

Maybe partners are filling this reputation gap ?  Partners ( especially Skyytek ) have dealt with SMB's for years and can align very well to SMB's in a cost effective manner using the cloud economics in play for product subscriptions.

So, is 2011 the year of SAP Business ByDesign for SMB's ?

Answer - we think so!