SAP Business ByDesign: Hands Off, Partners

Aside from the dessert spectacular, which would've been enough on its own, the SAP Influencer Summit -- the name suggests that somebody must've known that RCPU would be there -- offered an opportunity for SAP to tout the latest version of its hosted customer relationship management offering and brought CEO Henning Kagermann to town for what was (no kidding) billed as a "fireside chat" with the press. That there was no actual fire was somewhat disappointing -- and in fact, the meeting took the form more of a moderately controlled Q&A than that of a "chat."

Still, having covered SAP on and off for years, we've always appreciated the forthrightness of the company's executives, who are much less likely to use platitudes, meaningless fluff lines and burned-out marketing phrases than are their counterparts in Redmond. And while the news surrounding SAP CRM 2007 was interesting (see Barbara Darrow's excellent wrap-up for RCP here), RCPU was especially intrigued by a few of Kagermann's comments.

He said, for instance, that he doesn't see the business intelligence market even being a market in a few years time. (You'll remember that SAP bought BI titan Business Objects not long ago.) BI will just be part of what enterprise software does, Kagermann said, as absorption of BI vendors into bigger companies continues. And while he said that another big BI purchase from SAP wasn't likely in the next year, he wouldn't shut the door to one completely, basically giving a "you never know"-type answer.

Kagermann also quelled speculation that Microsoft and SAP were talking about a merger or acquisition of some sort, flatly denying rumors that he'd been talking to Microsoft about a sale.

But what intrigued us most about Kagermann's conference room Q&A -- actually, fireside chat does sound much better -- were his comments on partner recruitment for SAP's hosted ERP offering, Business ByDesign. The company is recruiting partners to sell the Software-as-a-Service play, but Kagermann doesn't want to hear from consultants or channel players looking to modify or sell add-ons to the system. No, at least for now, SAP is recruiting traditional resellers -- or partners willing to act as traditional resellers -- for Business ByDesign. Kagermann pointed partners and customers in search of customizable mid-market applications to Business All-in-One, SAP's budget, on-premise ERP suite.

"If somebody wants to modify a midsize product, he can buy All-in-One," Kagermann said. "We will not allow modification [of ByDesign]. We want to avoid the cost of ownership getting too high."

So there you go, partners -- resell ByDesign, but whatever you do, don't hope for consulting revenues from it. SAP wants to keep the SaaS service cheap, and consulting fees can get kind of expensive. It's a message that seems to be just the opposite of what Microsoft wants partners to hear. Redmond tells its channel players to find ways to add onto its budding SaaS offerings (including the hosted Dynamics CRM application), but SAP's message (to both partners and customers) is a stern "hands off." (At least for now -- Kagermann did leave the door open to partners eventually doing some consulting work as the product matures.)

And, in a sense, the message makes sense. SAP wants to keep ByDesign simple and inexpensive. In modern parlance, ByDesign is what it is -- and what it's not, or at least not supposed to be, is something that could become very expensive and unwieldy. Since most partners selling ByDesign are probably involved with lots of other aspects of selling and supporting SAP, it's not likely to be a big deal that they won't be able to reap consulting revenues from the on-demand offering. But it is unusual that in an era when pretty much everybody else is telling partners to specialize and develop domain expertise, SAP is encouraging them -- at least with this one product -- to be traditional resellers.

We're guessing -- although we don't know for sure -- that SAP must be offering a pretty sweet compensation deal to ByDesign resellers...possibly including some treats from the Influencer Summit's dessert table. That perk alone would make the whole effort worthwhile.

What experience have you had working with SAP? With ByDesign? What's your take on hosted applications that partners aren't supposed to touch? What was on the best dessert table you ever saw at a trade show or conference? Tell me at [email protected].

Posted by Lee Pender on 12/05/2007 at 1:21 PM