Many of you may have heard various news stories reporting that SAP Business ByDesign was being phased out. However, in a recent blog by Saugatuck, SAP strongly refutes this rumor, stating that the news is "dead wrong" as well as paints us a picture as to where ByDesign is headed.
Saugatuck, an independent software and technology analysis firm, conducted several interviews with SAP executives attending SAP's TechEd conference held in Las Vegas two weeks ago; and here's the straight truth. "This [ByD moving to the HANA] is a migration that has been planned, is being executed as planned, and has been misconstrued by several parties that simply should know better."
The result of which is that the "old" SAP Business ByDesign will continue to run as it always has, while a newer, Cloud-optimized version is simultaneously (and non-disruptively) developed and refined, and which will be part of the HANA Cloud Platform-based portfolio. Development and support for the current ByD continues utilizing SAP's India-based development team, which is also working with a German team on the platform migration. SAP Business ByDesign was, is, and always will be "strategically important to SAP."
At the core of this announcement, is a very normal, very predictable move by SAP, as it would be for any software vendor focused on building and evolving from traditional software into the cloud.
While some may ask, "Why is this happening?," SAP Executives attending TechEd confirmed that SAP ByDesign was envisioned prior to the advent of the Cloud, especially before the advent of significant Cloud use for business management software. It was designed and built originally as an on-premise solution, then re-envisioned and reengineered as a Cloud-based solution. SAP maintains the notion that ByDesign is an essential part of its cloud portfolio, particularly as a means to extend the SAP user experience from large corporate environments out to divisions and subsidiaries, as well as to supply and value chain partners
To help clarify, Bruce Guptill at Saugatuck put it this way. "ByD began as a small, custom-built bicycle with training wheels that SAP used to learn how to ride Cloud ERP to midsized customers, and to empower those customers to learn to ride Cloud ERP themselves."
ByDesign was built, rebuilt, and over-built during a time that powerful, more flexible technologies were coming into the market. To further Guptill's bicycle analogy, SAP's skillset, processes, plans and resources stuck it with cold-rolled steel, while the rest of the world was starting to build carbon-fiber bike frames. That made ByD more costly, and relatively limited from a capability standpoint.
So, the moral of this story is that SAP is going to let customers continue to ride the older bike, while building a "spiffy new, carbon-fiber" bike that has much bigger wheels and an incredibly large basket (HANA), filled with tools, parts, and functionality that are "universal within the SAP cosmos."
Potential Impact
Will SAP lose existing ByDesign customers because of this? Maybe, but very doubtful. This move by SAP provides little reason for customers to "abandon ship," but rather should excite the install base. Why? Because their currently running vehicle is being automatically swapped out for a turbo-charged Lamborghini at no cost.
Will SAP lose potential customers? Maybe, but again, doubtful. While SAP has enjoyed modest success in selling ByD in its current form, SAP's sales team are now empowered with Cloud expertise, with the ability to penetrate larger enterprises, pitching a "two-tier" approach, where existing customers are leveraged so to reach subsidiaries and supply chains of the larger enterprises. Netsuite has been operating in this fashion for some time now. But SAP Business ByDesign is a more powerful, less-expensive, more robust and definitely more scalable solution, that is positioned as a significant opportunity for SAP.
SAP's greatest challenge will be getting the partner ecosystem to buy-off on just sitting back while the migration happens. However, SAP understands that communication is critical, and they are further confident that this migration, which will enable the use of a single SDK (software development kit), will dramatically open up partner development of extensions, as well as reduce the costs of development.
In the relatively near future, customers will have a toolset that is unrivaled in the marketplace, where transactions flow faster than ever before, and where companies are able to run world-class, "Crystal" clear reports in seconds versus minutes or even hours.
To learn more about SAP Business ByDesign, visit our website or contact us today at 877.395.4SAP.
