SAP Goes On Demand - InformationWeek
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12/14/2010
01:16 PM
Josh Greenbaum
Josh Greenbaum
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SAP Goes On Demand

The prospects for the company's technology and multi-front, hybrid strategy look good. Now it's a matter of market execution.

The ByD SDK has a strong precedent in the market with Microsoft Dynamics' xRM , the company's SDK for its CRM product. These SDKs give partners a much-needed value-added role in the otherwise low-margin on-demand market, and SAP's ability to use the full complement of data models and processes inherent in ByD as building blocks for net-new innovation gives SAP's partners a particularly rich palette on which to build.

Another noteworthy product rolled out in front of the analysts was the latest version of Streamwork, SAP's think-out-of-the-box collaboration tool. The demo I saw was particularly interesting as it included a much-needed "process" template that actually showed how to get a particular collaborative process going. This is big step from the blank-slate methodology that Streamwork started out with: the entire so-called collaborative market will be useless without methods and processes for collaboration, and SAP has wisely started to step up to the plate and show the market how collaboration can be done.

Finally, Peter Lorenz, SAP's executive vice president for the small- and midsize-enterprise (SME) market, articulated the basics of an on-demand strategy that to me makes tremendous sense. The company's embrace of a hybrid strategy of on-demand and on-premise apps is practical, even if it violates a perceived wisdom about the purity of the on-demand model that I find ignorant of the realities facing most companies today.

Similarly, the acknowledgement by Lorenz that SMEs want on-demand to run their businesses without incurring large capital expenses, while large enterprises look to on-demand to deliver innovation at the edges of the core on-premise world, is also a solid basis for a pragmatic strategy that fits the reality of the market today -- and for some time to come.

All this great technology will be fighting an uphill battle in the market, particularly against the market clout and marketing budgets of Salesforce.com and Microsoft. While parts of the strategy -- like the subsidiary focus for ByD -- can be done on the cheap, there's going to have to be a lot of viral buzz generated in order to compensate for the relatively modest budgets that SAP has allocated to this corner of its vast portfolio.

Can SAP on-demand have an impact? I believe so. The company will start off 2011 with a solid competitive story on multiple fronts -- including a strong, multi-front on-demand message for SMEs, SAP's large enterprise customers, CRM buyers, and partners. How the year will end is all in the execution: SAP has taken the field, now we get to see what they can do once they get the ball.

Josh Greenbaum is principal of Enterprise Applications Consulting, a Berkeley, Calif., firm that consults with software companies and advises end users on technology infrastructure and application selection, development and implementation. Write him at josh@eaconsult.com.

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