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Business ByDesign Sputters: Is It SaaS or Is It SAP?

It'll be a short-ish RCPU today, as we're kind of swamped with pesky magazine stuff. Darn print model! Won't it die already? (Just kidding...especially you print advertisers. It was only a joke, really. We love print.)

Anyway, SAP got a bit of a spanking after its quarterly earnings announcement this week. Among other factors, part of what dragged SAP down was weakness in its Business ByDesign product, the German vendor's enterprise SaaS offering. Quoth the article linked above:

""It is expected to take around 12 months to 18 months longer than the original 2010 target to reach the SAP Business ByDesign $1 billion (640 million euros) revenue and 10,000 customer potential,' the company said in a statement."

Oops. Maybe that SaaS revolution isn't quite here yet, or isn't quite happening as quickly as SAP expected. Or maybe the problem is with Business ByDesign itself (although we don't know what that problem would be) or with how SAP is marketing and selling it.

We kind of suspect the former -- SaaS gets lots of ink and bandwidth (including here), but outside of the Salesforce.com and maybe NetSuite customer bases, there doesn't seem to be a super-rapid uptake of it right now, especially in enterprise software. RCP the magazine (hooray, print!) actually wrote about this not long ago.

Still, as Warren Wilson, research director at analyst firm Ovum Summit, said in a recent newsletter, it's not time for SAP to panic. Here, we quote directly:

"Business ByDesign's early results are disappointing, but perhaps not surprising given the scale of the undertaking in both technical and business-model terms...But Business ByDesign is a long-term, strategic bet, and SAP can afford to take some time to get it right...The slow launch isn't good news, but it's way too soon to worry."

We could hardly have said it better ourselves...so we're not going to try. We'll only add that SaaS investments for vendors, partners and even customers are in the early stages, and while we (and everybody else) expect them to grow, the SaaS revolution might be more like an evolution. Or, we could have just said this: Print's not dead, and neither is on-premises software. Not by a long shot.

What's your take on SaaS uptake? Send it to [email protected].

Posted by Lee Pender on May 01, 2008 at 11:54 AM


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