SAP has moved into the on-demand software business, offering a complete suite aimed at what is a relatively new market for the German software maker, the midsize market. 

The on-demand suite, SAP Business ByDesign, is designed around four key principles: completeness, ease of use, adaptability and significantly cutting total cost of ownership (TCO). It offers a personalised trial for invited customers to explore, evaluate and experience the solution, and competitive pricing of $149.00 per month per user, with lower price points for efficiency users.
Complementing the existing portfolio of SAP solutions for small businesses and midsize companies, the solution is already helping an inaugural group of live customers to improve business processes across their organizations. SAP Business ByDesign is available for selected early customers in the US and Germany, with early customers signing up in China, France and the UK. It will be available to South African customers in early 2008.
“With SAP Business ByDesign, today we are adding a completely new business model to our successful, established one and are changing the on-demand marketplace,” says Henning Kagermann, CEO of SAP AG.
“SAP Business ByDesign is designed to dramatically simplify IT for midsize companies by substantially reducing the cost of ownership and combining efficiency with business flexibility. The technical advantages of SOA enter the level of business processes and allow customers to exploit the full potential of new business trends without becoming IT experts. Such an affordable, easy-to-use and complete offering has been missing for midsize companies in the sweet spot until today.”
Director of SAP’s SME business in Africa, Derek Kudsee, adds: “Being first to market with a solution that companies can buy on a subscription basis confirms SAP’s leadership in this space. We believe that this new solution will further accelerate our growth right across the SME spectrum. It strongly complements the existing SAP Business One and SAP Business All-in-One solutions that have already achieved significant take-up in South Africa’s SME sector."
The new SAP Business ByDesign targets new midmarket prospects in the size range of 100 to 500 employees, growing companies that typically have not invested in these types of integrated business solutions.
SAP estimates that there are more than 60 000 such companies in Germany and the US alone and sees a worldwide market potential of more than $15-billion.
Henry Morris, IDC’s senior vice president for Worldwide Software Services, comments: “SAP’s new on-demand solution for the midmarket represents a bold initiative, featuring innovations in ease of use and ease of configuration while incorporating the learning gained by SAP’s years of experience in the applications business.”
Fully leveraging enterprise service-oriented architecture, the solution was built from the ground up on SAP NetWeaver, providing a future-proof platform for business that provides for a high degree of flexibility to adapt business processes in order to address evolving market demands. This offers midsize customers the assurance that their investment today is protected as their IT solution is able to scale to their requirements as their businesses grow and evolve over time.
SAP will rely significantly on its partner ecosystem strategy to drive the SAP Business ByDesign offering and is currently engaging with early solution reseller and service partners, as well as with complementary content partners.