Revisiting the ByDesign honeycomb: A very quick update on SAP’s LoB cloud strategy

[richard_hirsch]

Last year, I blogged about Financials On Demand (with the title  “The first honeycomb in the hive: Understanding the positioning of Financials OnDemand “) in which I described the re-use of Business ByDesign for other cloud offerings.

We haven’t heard much about this effort in the last few months.

In a recent blog by Dennis Howlett concerning SAP’s Q1 FY2013 results, I found an interesting paragraph about Business ByDesign.

On our call, Snabe talked about wins against NetSuite and Salesforce.com on products that are subsets of the main BYD suite, including Sales OnDemand. I can point to wins the other way. Snabe said that the mid range is continuing to buy functions with finance leading the way. I find this depressing. The cloud provides ways to transform business. If SAP is a proxy for what’s happening in the market then that isn’t the case in the mid market. More research is needed here.

I was curious to know whether this strategy was being actively pushed in other parts of SAP’s cloud organization.

At the recent Q/A session following the announcement of SAP’s Q1 2013 results, financial analyst Richard Sherlund (Nomura) asked Lars Dalgaard a question about his progress in this area:

Then lastly, if we could just ask Lars for an update on ByDesign, in terms of his work on making that more modular and on HANA and where we stand on that?

Here is Lar’s response:

Yes. So the success we're having in unbundling Business ByDesign's architecture has been extremely strong recently. We've just had some really, really big win, a line of business focused in Sales OnDemand. And we're seeing that this line of business initiative, which actually was started by SAP before I got there, but I've just been able to put a lot more tonnage behind the strategy. It is clear that people buy cloud in business units and line of business, and that's the way that it's bought. And so we've had real success in splitting that out. And particularly, what we're seeing from the ByD code is the financials is what's very popular.

Based on this statement, it appears that SAP is continuing this strategy of unbundling “honeycombs” from ByDesign.  The only reference to ByDesign during the SAP’s Q1 2013 results call was as a source of material for other cloud offerings (Financials OnDemand, etc). There were no details on the status (number of the customers, for example) of ByDesign as a complete suite.  I don’t know whether ByDesign will shrivel away but it is obvious that as SAP’s cloud-related strategy evolves and includes an ever-increasing number of offerings that the focus of  cloud-related marketing / resources lie elsewhere.