SAP going after mid-market with new ERP suite

During his keynote at SAP's fourth annual analyst summit, Products & Technology Group President Shai Agassi shed some light on the company's strategy for addressing the mid-market, firms with $100 to $200 million in revenue and 100 to 2499 employees.

In mid-2007, the company is expected to release a new version of its All-in-One suite, based on SAP's mySAP ERP 2005 and NetWeaver platform. Currently in testing with some customers, the new suite, likely to be called All-in-One 2007, will be available as on premises, on demand or in a plug-and-play appliance. SAP will launch the new All-in-One initiative with manufacturing verticals. "We are taking something proven that exists in the market and seeing if we can put in package and serve risk averse people," Agassi said.

The goal of new suite is to dramatically reduce what Agassi called a tax--across technology, operations, technology, user training, integration and infrastructure--on implementing and running ERP applications. "We want to figure out a way to bring down the cost of operations by a factor of 5x to 10x," Agassi said. A company should be able to set up the software in one week, cost half of what it costs today and have a flexible deployment model (customers can build their own composites on top of it), as well as predetermined roles and an event-centric user experience, Agassi said. "

Agassi called the new suite a 7x24 solution. Within seven days companies should be able to get the software running and in the next 24 days customize it to their specific needs, although many companies will want to move more slowly.

SAP hopes to achieve the 'compression' of its mySAP ERP suite by embedding best practices for customer implementations; reducing installation and deployment time via a prescribed set up model, including a set of questions that customers answer; lower training requirements; and easier integration services. "We can fit customers into a solution, not just into a product, and  that’s the goal we started with and what A1 [All-in-One is evolving into," Agassi said.

Many people who follow SAP are skeptical that the company can compress a large enterprise suite and make it work for smaller companies. I asked Agassi about the issue, and he responded, "You'll have to wait and see." With its enterprise SOA framework, business process platform and software ecosystem, SAP has more flexibility in how it composes or assembles products for different verticals and industries out of its growing parts library.

For SAP to reach its goal of 100,000 customer by the end of 2010, this new All-in-One suite will have to be a home run. Agassi is already thinking beyond 100,000 customers.  "When companies go into business, I want them to think SAP, not Microsoft as they do today," he told me.

SAP doesn't plan to get into the productivity software business or to become desktop operating system, but Agassi wants companies to associate running their business with SAP as the marquee software brand. As SAP pursues its convergence of applications and middleware, and delivers business information anytime, anywhere via portals, mobile devices and with user interfaces targeting different customer profiles, it will begin to be released from its traditional consignment to the back office.