SAP hopes its new Business ByDesign Feature Pack 3.0 and a revived channel focus will help it drive half its revenue through the channel by 2015. About 20% of SAP’s current revenue across all customer segments now moves through the channel.
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The new feature pack for the SAP-hosted ERP aims to ease customer relationship management (CRM), supply chain management and project management implementations for small and medium-sized businesses (SMBs).
The original Business ByDesign came online in September 2007, but it was seen as inflexible and lacking multi-tenancy — a technology seen as key to Software-as-a-Service (SaaS) offerings. Partners also complained that SAP did not provide service and hosting opportunities for them.
But SAP made some big improvements over the past four years, observers said. SMB Group partner and analyst Laurie McCabe said after the initial launch that SAP went back to the drawing board.
“They’ve improved it quite a bit with it now being multi-tenant [and] easier to sell, provision and support,” McCabe said. As a result, more partners and better partners are selling it.
With Feature Pack 3.0 (Feature Pack 2.6 came out in February), SAP has a product that is easier for partners to deploy and it syncs better with customer best practices, said Curtis Fry, vice president of Navigator Business Solutions, an SAP partner.
“Customers now have control over areas such as purchasing. When it comes to purchase orders, work flow and billing alerts, it’s a much easier process for them,” Fry said.
Pete Martin, president and CEO of EntryPoint Consulting, which recently became a ByDesign partner, said version 2.6 had the stability that SAP needed, but 3.0 fixed some logistics and management gaps. “We delayed our commitment until recently because we knew that 3.0 was coming out,” Martin said. “There were enhancements across the board, but they really did a fantastic job with workflow and reporting.”
Fry also lauded the software development kit (SDK) SAP Business ByDesign Studio for addressing some of the earlier flexibility issues. “[Business ByDesign] has come a long way to develop applications. For example, we built an “E-commerce connector” with the SDK that opens up development opportunities to customers who need more functionality in their software.”
SAP is looking for around 10 to 20 Business ByDesign customers per partner by the end of the year. There are 95 partners in North America, according to Martin.
SAP gets channel love
Some partners said SAP has improved partner relationships in general. It has rethought how it will go to market after years of channel indifference and is finding more ways to get partners involved in more sales. “It’s a huge change of mentality and culture,” Martin said.
SAP which pretty much owned ERP in large enterprises has seen stiff competition in that arena from Oracle and has also struggled to make its mark in SMBs. But the company has gotten more aggressive. Last year one executive said the company wants to hit the billion-user mark by 2014.It looks like partners will be a big piece of that effort.
“SAP can’t attain that goal directly, and it now has a broad, comprehensive channel strategy,” Martin said.