News and Views from SAP's Sapphire Show and User Conference 2008

Hot topics of conversation included: Business ByDesign's slow rollout and future plans, Rimini Street's offering of third-party maintenance for SAP applications, and the SAP and RIM partnership for business users' BlackBerrys.

By Thomas Wailgum
Tue, May 06, 2008

CIO — SAP's annual Sapphire show and ASUG user conference in Orlando, Fla., produced a lot of noteworthy announcements, events and discussions about SAP's product sets and future plans.

First off, notes Ray Wang, a principal analyst at Forrester Research, is that SAP is moving full-steam ahead with its strategy to have customers upgrade their current systems. At the same time, SAP is making it clear that it's aware of the pain of upgrades. "Enhancement packages are starting to provide value and are different from a traditional upgrade," Wang says.

For those customers who don't want to upgrade or pay SAP maintenance and support fees (especially the recently increased fees for new customers), news broke on Monday that Rimini Street, which provides third-party maintenance and support services for Oracle's PeopleSoft, JD Edwards and Siebel packages, will start supporting SAP's product set by early 2009. (See "Rimini Street Will Now Offer Maintenance Support for SAP's R/3 Products" for more details on the announcement and why Rimini Street made the move.)

"Third-party maintenance is alive and well with Rimini Street offering options by the end of 2008," Wang notes. "This is huge news as the demand for third-party maintenance is quite significant."

As of Tuesday afternoon, there's been "no reaction from SAP" in relation to the announcement, Wang notes. (To read an interview with the CEO of Rimini Street, Seth Ravin, see "The Man Behind 'Half Off' Third-Party Software Maintenance.")

SAP also noted on Monday that small and midsize businesses now constitute 75 percent of its overall customer base, totaling more than 35,000 customers. (See "SAP Pays Partners, Goes with Gusto for Small and Midsize Business Customers" for an inside look at SAP's SMB strategy.)

As for Business ByDesign, SAP's new on-demand software offering whose rollout and goals are being scaled back, SAP executives say that they have not lost faith in the business model. (SAP had initially planned to achieve $1 billion in revenues and 10,000 customers for Business ByDesign by 2010; those goals, however, will take 12 to 18 months longer, SAP announced.)

It appears that SAP underestimated the technical and integration challenges in rolling out Business ByDesign, or BBD. Vinnie Mirchandani, a former Gartner analyst and founder of vendor consultancy Deal Architect, notes in his blog that SAP's top execs—co-CEOs Henning Kagermann and Leo Apotheker—attributed BBD's slowdown to "unique customer configuration and other issues they had not anticipated in the labs" during the initial BBD deployments.

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