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SAP’s SME Product Marketing Team Tells All (or Most of it, at least)

Written By: Predrag Jakovljevic
Published On: July 25 2011



The recently held SAPPHIRE NOW 2011 event in Orlando, Florida had many newsworthy items with regards to SAP’s solutions for small and medium enterprises (SMEs). For one, the much publicized and anticipated multi-tenanted software as a service (SaaS) SAP Business ByDesign product has reached a milestone of 500 customers and availability in a dozen countries or so (after initial hiccups and faltering). For its part, the proven lower-end SAP BusinessOne offering has reached a whopping 30,000 customers worldwide.

The upper-end product for SMEs, SAP Business All-in-One, which packages functionality from the flagship SAP ERP product (i.e., the two products have the exact same DNA), continues to do well in its target markets. The product has lately been bolstered by 22 (and many more coming soon) SAP Rapid Deployment Solutions (SAP RDS), which are fixed-scope and fixed-price add-on (tuck-in) sets of focused functionality that can be deployed with SAP Business All-in-One, including those in the realm of supply chain management (SCM), sales & marketing, product development & manufacturing, and finance.



My colleague Jorge García has recently discussed in his blog post about the SAP BusinessObjects Edge business intelligence (BI) offering for SAP’s SME customers, while my own multi-part series from 2010 on competing Oracle Accelerate and SAP SME offerings is still quite valid (i.e., not that outdated). Thus, immediately following the conference, I posed a number of questions to SAP’s SME Product Marketing Team with regards to the latest developments and state of affairs in this division of SAP. My questions and SAP SME’s answers are as follows:
PJ: Of SAP Business One, SAP Business ByDesign, and SAP All-in-One, which enterprise resource planning (ERP) product has been selling best of late and which of these do you expect to perform well (best) in the future?

SAP SME: Each of the products targets a different market segment. It would be fair to say that in the markets that they target, they are all selling really well. Given this, we might choose to re-cast and address the question from a few perspectives:

  • In terms of Volume: SAP Business One

  • In terms of Revenue: SAP Business All-in-One

  • In terms of SaaS deployments: SAP Business ByDesign continues to improve and strengthen its position and market footprint


Clearly, as products mature and the market shifts, we continually track the behavior and adjust our marketing and sales objectives.

PJ: Who is the bigger threat in the SME space: Oracle Accelerate or incumbent mid-market vendors (Epicor, Sage, Microsoft Dynamics, SYSPRO, etc.), and why do you win against or lose to these competitors?

SAP SME: In this regard, we focus on the following two dimensions that we think about:

  1. By geography – there are a number of local players, e.g., Totvs in Brazil, Kingdee in China, Tally in India, that have a huge local presence and market that they are “made for the local market” theme

  2. By the maturity of the customer


It’s fair to say that our biggest competitor is a “Do nothing” or “Continue to use my spreadsheets” attitude. At the larger companies, especially companies that are distributed or are subsidiaries, we see the competitors that you mention above.

PJ: What is your current geographic coverage (offices, resellers, etc.) per product, and in how many languages are these products available?

SAP SME: Most of our products are localized in about 50 countries and are therefore in the languages one would expect them to be in to cover these markets. For example, SAP Business All-in-One solutions are localized for more than 50 countries and SAP Business One is for over 40 countries.

PJ: How are your major system integrator (SI), independent software vendor (ISV), and other partnerships going for each SME line (with as much detail as you are willing to provide)?

SAP SME: We have several thousand partners (~4,500) focused on the SME market. The partners tend to specialize on a product based on the “ancestry” of their founders. As is to be expected, there are a number of value added resellers (VARs) who are bigger and tend to have a larger share of our business.

Many of our partners build their business by focusing on the needs of a particular geography (e.g. the DACH cluster in Europe) or specific industries (e.g. consumer products); typically, our software solution partners (SSPs) develop applications that add-on top of our SME solutions and cover both industry and geography. SAP does not provide the “by partner” data that you are looking for.

PJ: Besides the SAP Business ByDesign customers, what percentage of your SME customers are SaaS/on-demand/hosted? Has that become the order qualifier and/or winner in your market?

SAP SME: We are still figuring out the exact figures on this issue. Please stay tuned for the official numbers.

PJ: What is your strategy towards social and Enterprise 2.0 tools and roles-based user experience, and their deployment for your target SMB customers?

SAP SME: Not surprisingly, we continuously innovate based on market and user trends. So, we’d like to pick up on the following two main dimensions here:


  1. Changes to our products: The new SAP Business All-in-One user interface (UI) is an example where we are reflecting the changed expectations of customers, trained in a world where personalization (e.g., iGoogle) is the order of the day. We then adapt the UI experience to the enterprise market we focus on to layer in both personal tools (e.g., email, Twitter, etc.) and enterprise tools (e.g., BI, enterprise search, transactional information). We want the user to be able to do most of his/her work without leaving the ERP application for, e.g., the ability to enter ERP and CRM transactions, do Outlook emails, manage various web widgets/mash-ups, and run business analytics from the same UI.

  2. Integration with third-party products: Using SAP Business One as the example this time, we’d point you to the integration that Core Systems did with its eShop application – enabling SAP Business One customers to set up an eCommerce store as well as the backend to support it in a matter of minutes.


Business Objects and Sybase Giving an additional Edge
PJ: What BI/reporting/performance management tools come embedded within your individual SME product lines, i.e., free of charge and what is optional (for an extra price)?

SAP SME: The free and extra price add-ons per the three main SME product lines would be as follows:

Free for SAP Business One:

  • Viewing pre-built SAP Crystal reports and dashboards


Extra Price Add-Ons for SAP Business One:

  • SAP Crystal/SAP BusinessObjects Edge BI/BI OnDemand to build additional reports

  • SAP Crystal/SAP BusinessObjects Edge BI/BI OnDemand for additional dashboards

  • SAP BusinessObjects Edge BI with data integration and build custom data mart/warehouse, and do ad-hoc query and analysis

  • SAP BusinessObjects Edge Analytic Applications for pre-built industry solutions

  • SAP BusinessObjects Edge Planning and Consolidation for budgeting, planning, forecasting, financial consolidation and reporting

  • SAP BusinessObjects Disclosure Management for Extensible Business Reporting Language (XBRL) reporting

  • SAP BusinessObjects Edge Strategy Management

  • SAP StreamWork for collaborative decision making

  • SAP BusinessObjects Access Control version for midsize companies

  • SAP BusinessObjects Global Trade Services (SAP GTS) version for midsize companies


Free for SAP Business All-in-One:

  • 31 interactive reports and dashboards supporting 7 end-to-end business scenarios in 8 application areas (the UI Business Analytics Best Practices Package)


Extra Price Add-Ons for SAP Business All-in-One:

  • SAP BusinessObjects Edge BI and get additional pre-built reports and dashboards for free (the BI Best Practices Package), and use against SAP Business Warehouse (SAP BW) if implemented

  • SAP BusinessObjects Edge BI with data integration and SAP BusinessObjects Edge Rapid Marts to enable line of business (LOB) specific ad-hoc query and analysis

  • SAP BusinessObjects BI OnDemand

  • SAP BusinessObjects Edge Analytic Applications for pre-built industry solutions

  • SAP BusinessObjects Edge Planning and Consolidation for budgeting, planning, forecasting, financial consolidation and reporting

  • SAP BusinessObjects Disclosure Management for XBRL reporting

  • SAP BusinessObjects Edge Strategy Management

  • StreamWork for collaborative decision making

  • SAP BusinessObjects Access Control version for midsize companies

  • SAP BusinessObjects Global Trade Services version for midsize companies


Free for SAP Business ByDesign:

  • Viewing pre-built SAP Crystal reports and dashboards


Extra Price Add-Ons for SAP Business ByDesign:

  • SAP Crystal/SAP BusinessObjects BI On-Demand to build additional reports and dashboards

  • SAP BusinessObjects Edge Analytic Applications for pre-built industry solutions

  • SAP BusinessObjects Edge Planning and Consolidation for budgeting, planning, forecasting, financial consolidation and reporting

  • SAP BusinessObjects Disclosure Management for XBRL reporting

  • SAP BusinessObjects Edge Strategy Management

  • SAP StreamWork for collaborative decision-making


PJ: What is your mobility strategy for these SME products, in light of the SAP and Sybase merger (and a big mobility push by SAP, as witnessed at SAPPHIRE NOW 2011 and SAP’s recent “Run Better” world tour)? Has mobility become a discriminating factor in this market segment?

SAP SME: Just as the Web changed consumers’ behaviors and expectations, the mobile phone and devices have also permanently changed their expectations. Mobility is already the price of entry into many deals. SAP is uniquely positioned to offer products/services to SMEs on the following three major fronts, as appropriate for the customer:

  1. Business applications that bring the ERP system to a mobile device (targeting over 40 apps in Q3/Q4 2011)

  2. Development platform (i.e. Sybase Unwired Platform [SUP]) to build apps once and deploy them natively across multiple operating systems

  3. Security/device management services delivered via Afaria from Sybase


SAP's mobile BI solution was named one of “The Top 15 Essential iPad Applications for Work” by PCWorld (please see the article here), while there have been more than 20,000 downloads of the SAP Business One mobile application.

PJ: What issues or challenges are still preventing you from taking the SME market by storm?

SAP SME: None – we have a phenomenal portfolio of products for the SME market and have been making huge strides, year over year, in growing our business. For e.g., the 30k customer for SAP Business One, as you indicate below. Bear in mind that as recently as 3.5 years ago SAP Business One only had 11k customers, so that is an incredible growth trajectory for a product in a supposedly mature category of ERP.

Demarcation Lines and the RDS Connection
PJ: Why has SAP BusinessOne been the unsung hero of a sort at SAP, i.e., hardly anyone talks about its 30k customers (whereas 500 SaaS customers was all the rage at SAPPHIRE NOW 2011)?

SAP SME: We have a portfolio and continuously balance the investments in the products in the portfolio. SAP Business One has been and continues to be very successful (see the previous answer). We are building SAP Business ByDesign and you are seeing us discuss its evolution. In fact, during the keynote at SAPPHIRE NOW 2011, our Chairman Mr. Hasso Plattner very prominently brought up SAP Business One running with a SAP HANA in-memory device, so we would argue that SAP Business One continues to get the appropriate level of executive attention.

PJ: How do you demarcate between SAP Business One, SAP Business ByDesign, and SAP Business All-in-One? Namely, some customers could benefit from either product, but what are the key decisive factors in opting for one vs. the other?

SAP SME: We offer customers a choice – so they can select solution(s) that best meet their needs. We recognize that company size alone does not demarcate the applicability of our solutions. For example, Nuestro Queso is a start up focused on cheese making for the Hispanic market. Due to the business they are in, the FDA requirements and their desire to grow, they went with SAP Business All-in-One. In contrast, LORD Corp., which is a well-established company, chose to go with SAP Business One because the product met the needs of some of its subsidiaries.

PJ: For companies that need strong SCM functionality, which is not part of SAP Business All-in-One, what is your advice to them: to go for a full-fledged SAP Business Suite or still opt for SAP Business All-in-One with best practices (and implement SCM in a traditional way, which in turn defeats the SAP Business All-in-One purpose of quick implementations)?

SAP SME: We’d recommend that they consider the aforementioned RDS add-ons as they serve the interests of the SMB customer. RDS offer quick time to value, predictability in cost and deployment time, and, ultimately, SCM functionality to run their manufacturing operations. For specific SCM related RDS solutions, we have a couple of options available right now:

  • Extended warehouse management

  • Supplier relationship management (SRM)

  • Supply network collaboration


Additional RDS packages are being launched in Q3 2011, including:

  • SAP SCM for global available-to-promise (ATP) check

  • SAP Service Parts Planning

  • SAP SCM for demand planning


For more details on RDS, visit the Web page here.

PJ: Incidentally, how are SAP RDS related to your SME solutions: complementary, overlapping, something else?

SAP SME: RDS solutions are a direct outcome of the packaging work done by the SMB team at SAP for many years. We have simply taken this notion of packaging, fixed scope and pre-determined pricing to the entire customer base. Thus, RDS solutions enable our customers to start off quick and in a scoped manner and grow as their needs grow. All while knowing that there is a clear roadmap that is available to them.

Dear readers, what are your views, comments, opinions, etc. about SAP’s SME offerings and the vendor’s stated figures and milestones above? If you are a reseller of these programs or a recipient, I would appreciate you sharing your experiences with both the offering and the provider. How do they stack up against solutions from the abovementioned incumbent mid-market ERP providers’ offerings?
 
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