SAP's Business ByDesign: Explaining the Delays

SAP's Business ByDesign: Explaining the Delays

Summary: In the wake of the brouhaha surrounding the delayed rollout of Business ByDesign and the allegations of technical difficulties (the thread in the Enterprise Irregulars discussion was called BBD=DOA?), I spoke to Hans-Peter Klaey and Jeff Stiles, the two men at SAP responsible for bringing BBD, and the rest of the company’s SMB portfolio, to market.

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In the wake of the brouhaha surrounding the delayed rollout of Business ByDesign and the allegations of technical difficulties (the thread in the Enterprise Irregulars discussion was called BBD=DOA?), I spoke to Hans-Peter Klaey and Jeff Stiles, the two men at SAP responsible for bringing BBD, and the rest of the company’s SMB portfolio, to market. The two provided a little color to the BBD delay issue, and in doing so made the delay seem less problematic than it initially appeared, at least for now.

The main issue regarding the delay of BBD has to do with operationalizing the on-demand model in a cost-effective way. This translates to a realization that the existing release of BBD, now in use by some 150 customers, can’t be scaled up to handle thousands of customers in a cost-effective manner. This is a major operational problem to be sure: SAP can ill afford to ramp up to a massive deployment of BBD if it’s not cost-effective to do so. Klaey mentioned that these operational issues seem to have been dealt with in the next release, which is slated to come on line in the “next few months.”

Also bedeviling BBD are some performance issues in the current release that are part of the operational problem. Again, Klaey told me he felt that the pending release had dealt well with these issues and would move response times back to an acceptable, sub-second, level.

Klaey disputed my assertion that on-boarding partners was behind the delays as well. He says there are currently 50 partners and that number would remain largely stable throughout the year, though it would be increased as BBD gets closer to show time. I’ll give him the benefit of the doubt on this – the operational problems are enough in my book to delay not only general availability but also the partner ramp-up process itself – but I’m still waiting for the perfect description of the partner archetype that can be used as a model for growing the partner community to over 1000 – the intended goal – by the time BBD reaches full volume. It’s not going to be easy to find these partners, and my guess is that SAP will be doing more than just midwifery here to make this BBD partner channel find its critical mass.

I will add that it’s clear to me that the delays in BBD are due to two other factors: the first is that SAP is a naturally conservative company, and is loathe to risk its brand on poor quality releases. The last thing BBD – and SAP – needs is a release cycle that is premature and exposes the company to the wrath of the market and its customers. More than most, SAP tries, and usually succeeds, to avoid releasing software before its time.

The other factor is the level of the maturity of the on-demand market. Credit Salesforce.com for leading the charge not only in getting things right but getting them wrong as well, including performance and downtime issues that Salesforce.com fixed a long time ago. SAP’s entry into the market comes relatively late in the maturity curve of an admittedly immature market, and with that timing comes the burden of being a little more bullet proof than the pioneers like Salesforce.com were in their salad days.

Do these rationales get SAP off the hook regarding BBD? Not in the least. The promises made about market impact, customer wins, partner wins, and revenues have not been retracted, and SAP will be held accountable for any failure to deliver on the enormous expectations that SAP, and the market, have saddled BBD with. What I think these details show are some growing pains, mixed with some serious caution, that don’t as of yet indicate any irrecoverable problems. The fact that we’ll all have to wait another year to see how BBD is going to fare may be a little frustrating for all – excepting the competitors who just got a little extra breathing room on the way to a potentially industry-changing battle sometime in 2009 when BBD hits its stride. See you then.

Topics: CXO, Enterprise Software, Hardware, SAP, IT Employment

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  • Business By Delay - You don't know, what you haven't experienced

    Phil has a great post on the topic on his blog that makes the point that after validating the market, the are now acknowledging its harder than they thought. After spending nearly three years in the Office of the CEO at SAP and now two years at Appirio working with Google and salesforce.com, I can fully appreciate the degree of change needed at SAP requires a massive DNA change in all parts of the business. While they can simply try to be a fast followers of salesforce.com on the externally visible parts of the model (free and easy trial editions, trust.salesforce.com, etc.) the more hidden and subtle parts of the equation will be impossible to internalize until they launch. Operational processes around the product are on thing (the current delay), but how you generate leads, inside sales, high volume sales processes, culturally serving the customer every month (support & sales), quickly iterating the product while retaining longer term dev objectives, etc. will only become problems you can solve after a broad release. Planning out the Xs and Os is critical, but there is nothing like being in the game for really understanding what is needed. I expect similar hiccups from SAP in these areas after broad release (in 12-18-24 months).
    Narinder Singh