Infosys to develop a SAP Business ByDesign practice

Infosys plans to develop an SAP Business ByDesign practice as an offering for subsidiaries of its large customer base. It's an interesting development.

Last evening I had dinner with senior Infosys executives. While much of the conversation centered around Oracle Fusion Apps and responses to the next generation of internet capable users there was in interesting aside about SAP Business ByDesign.

Infosys says that it is taking training from SAP as a first step to developing its own training scheme that it will deploy internally to its staff. The company did not discuss numbers but the impression I get is that Infosys believes there is a good business to be had in offering ByDesign as a 'surround' strategy for at least some of its Global 2000 customers who might otherwise consider deploying SAP Business Suite into subsidiaries.

The one fly in the ointment is that today, SAP is only supporting localised operations in six countries: US, Germany, France, India, UK and China. Infosys believes that it will be able to show demand in other territories and this will accelerate development at SAP.

This is an interesting development. Infosys usually operates at the top end of large scale business so you have to wonder how they will be able to scale implementation costs to suit the subsidiary environment in a way that does more than add a rounding error to its earnings.

The company does not see this as a problem since it has the advantage of labor cost arbitrage in India compared to other locations. It argues that its portfolio customers have hundreds of small subsidiaries where ByDesign could be a good fit.

As demonstration of its commitment, the company said it is considering the potential for a series of add-ons in industry verticals which it will use as a way to create additional revenue streams. They are clearly serious about ByDesign as an opportunity to expand their solution portfolio footprint.

In internal discussions, I have been critical of SAP's go to market on the grounds there is insufficient clarity into how this will work. My comments have been directed towards the small and medium sized business where SAP is initially positioning the solution. This development suggests SAP will not be averse to engaging existing SIs that demonstrate the capability to quickly move in this direction.

Coincidentally, I bumped into Doug Merritt, EVP with responsibility for the SAP on-demand/SaaS line of business. He said: "This will surprise some but we don't think there is any limit to where ByDesign can go. There's a ton of opportunity out there."