SAP to Finally Ship Business ByDesign SaaS Suite

Published: February 1, 2010

by Timothy Prickett Morgan

Two weeks ago, The Four Hundred told you that German application software giant SAP was projecting that it would beat Wall Street's expectations for sales in its fourth quarter as it was at the same time saying that it would be rejiggering its support fees, presumably to counter complaints from customers that they needed cheaper support than SAP was providing. In its discussion of its results, the company said that it would finally be shipping its Web-based, hosted Business ByDesign suite this year.

For the quarter ended December 31, SAP's sales were pretty much the same as the preliminary results put out three weeks ago. Software and related service revenues were €2.56 billion, down 4 percent; software sales €1.12 billion came from software sales, a decline of 15 percent compared to the year-ago quarter, and overall revenues, including other services and training, fell by 9 percent to €3.19 billion. Net income came to €727 million, down 12 percent.

In a conference call with analysts (on Wall Street and in Frankfurt, London, etc.), SAP divulged the different pricing tiers for its support. Standard Support is now 18 percent of license fees, while Enterprise Support is 22 percent. I was, quite frankly, expecting a larger gap--meaning a lower price for Standard Support.

After what seems like years of development, SAP announced that its Business ByDesign SaaS-style ERP software will be rolled out in production by the middle of 2010 in Germany, the United States, the United Kingdom, France, China, and India. The Business ByDesign suite was launched with much fanfare back in September 2007 and was supposed to roll out in 2009 or so. SAP's goal was to have the online ERP tools generating $1 billion a year in revenues with 10,000 customers by 2010.

Last year, for reasons SAP was not too clear about, the SaaS software was quietly pushed out as SAP gave the code some spit and polish. It probably had something to do with putting out a whole new kind of product with what is presumably a much lower price tag during an economic meltdown. With Oracle not really doing SaaS in a big way, there was no reason for SAP to go first.

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