SAP reveals slow uptake of Biz ByDesign downunder

SAP has rejected suggestions uptake of Business ByDesign had been disappointing in Australia, despite revealing to CRN today just 20 local customers had signed up for the cloud-based ERP system since its local launch last year.

The admission coincided with SAP’s naming of its second ByDesign partner in Australia, Praxa, a Sydney-based applications development and IT consultancy which joins CN Group, SAP’s first ByDesign partner, announced at the product's release.

ByDesign is a key weapon in SAP’s bid for the SMB and mid-tier ERP markets, however, the software giant’s legacy as an enterprise player presented challenges.

But Greg Harbor, SAP’s VP of on-demand solutions said he felt demand for ByDesign had been “strong" amongst Australian SMBs, given what he saw as the natural trepidation of many in moving core data and applications into the cloud.

“We are not discouraged by the small number of customers,” Harbor said.

“ERP in the cloud is a huge concept for companies to get their heads around; we are not taking to customers some ‘cute tools’.”

Praxa general manager Jim Aivaliotis said he expected to see strong demand for ByDesign in Australia, with the company’s ability to deliver and support the solution bolstered by the fact it had become a customer itself. Yet despite signing on as SAP’s second ByDesign partner in December, it had only managed to sign up one customer, he admitted.

By the end of this year Harbor said he hoped SAP would have around 60 ByDesign customers in Australia, 80 percent of which would be serviced through its dedicated partners, expected to number just four or five by Christmas. At the moment some two-thirds of SAP’s local Business ByDesign customers are SMBs and Harbor said he expected most of the growth to be in the upper end of the SMB and genuine mid-market space.

Cannibalisation

However, the features SAP hopes will make ByDesign a hit with SMBs also make it appealing to enterprise customers, attracted by the sophisticated data analytics capabilities, easier deployment and lower costs of the cloud-based ERP option. Australian users of Business ByDesign paid on average $120 per month per user.

For instance, SAP names global packaging and recycling giant Visy - based in Melbourne - as one of its key Australian customers for ByDesign. Harbor said it is one of a growing number of SAP enterprise customers edging closer to the cloud, something he admitted would result in some of the company’s traditional enterprise revenues being diluted.

“Will we get a little bit of cannibalisation? Yes, I think we will,” Harbor said. But he remained confident the bulk of demand for Business ByDesign would come from those companies “that had been struggling to deploy an A1 product”.

SAP has so far signed on a total of 1000 customers globally for ByDesign.