SAP Influencers Summit 2010 – Is onDemand ready for the mainstream?

[Former Member]

SAP Influencers Summit 2010 – Is onDemand ready for the mainstream? 

I’ll be at the Influencers Summit in Palo Alto this week and I wanted to pick up on a few topics. The first of which is onDemand. Now is a critical time for onDemand and it will be a hot topic. A lot of people don’t know too much about onDemand so I wanted to get back to basics.

What is onDemand?

For the uninitiated, onDemand is SAP's cloud based ERP environment. Think of it as Salesforce.com for core business process.

I've had an eye on the onDemand platform for some time now and it hasn't been something that has captured my imagination. There are several reasons for this, the main one being is that onDemand plays to the smaller SAP customer, and Bluefin Solutions focuses on Large Enterprise SAP customers. In addition, onDemand has been traditionally limited in the business processes that it supports as well as limited in scalability – both as a multi-tenant platform but in terms of the size of customer that could run on it.

To add to this, there hasn't been a mechanism by which SAP Partners can make process change, with for example a Software Development Kit. So effectively, there's no route to market from a partner perspective, and no revenue sharing model by which we could do business. SAP knows that in order to make onDemand work, it needs a partner ecosystem to support the growth – and in the Enterprises Software industry, SAP has created a thriving ecosystem of both small and large partners.

And to this end, it has produced a Partner SDK, and is looking at how to operate a revenue sharing model to engage with partners. It has some partners signed up already – probably some smaller partners that aren't from the SAP community, and other very large partners that need to be signed up for image purposes. Currently though there seems to be a lack of buy-in from Tier-2 SAP partners. Bluefin is an example of the sort of SAP Tier-2 Services Partner that I would suppose SAP wants to be involved with this stuff.

What does a good onDemand partner look like?

The partnership model with SAP is likely to be an revenue-based model that requires partner investment. The customer gets charged $X dollars per month per user, and the up-front setup cost cannot be punitive, even if the customer requires some customization.

Therefore partners will have to do the services work at cost (or similar) initially, and then make their profit during the revenue-sharing period that the customer runs onDemand. So partners have to be willing to make this investment.

But it also means that the realization phase of the onDemand deployment needs to be short, sharp and focused. It will have to bring the business along a fast journey and be bought into the end-solution. And this means agile methodologies and business-focused vision.

Why is now a critical time?

So I would assert that this week is a going to be a critical time for onDemand. With the availability of the SDK, SAP needs to make a clear statement of intent. Is onDemand going to scale into Large Enterprise, can SAP make a sustainable partner model and will we be able to make the kind of changes that make onDemand a really interesting platform.

And of course, more to the point, is SAP a serious competitor to the Force.com platform? SAP have some onDemand reference customers but it’s unclear whether they won those due to brand, price, or if they won head-to-head against other cloud or on-premise solutions.