Skip to Content

As I was preparing for my trip to this week’s TechEd in Las Vegas, I was surprised to find references on Twitter to an article in the German newspaper Handelsblatt entitled “SAP stops billion Euro Project” which referred to Business ByDesign.

In the article, there were statements from SAP spokesmen saying that the product wasn’t being shutdown but that the product would remain in the portfolio and customers would still be served.  Thus, the article title appeared to be misleading.  Other statements, however, stated that a smaller developer team would continue the product development and that service and maintenance for ByDesign would be performed in India.

The damage had been done however and the word spread throughout social media that “ByDesign was being stopped”. 

Some competitors such as NetSuite already created offers to migrate ByDesign customers away from the platform.

The Handelsblatt article only had a few short quotes from SAP spokespeople. A second article in “All Things D” contained new statements from SAP regarding the future of ByDesign.  

SAP spokesman Jim Dever said the company’s plan for Business ByDesign is a little more nuanced than the total shutdown of the product, as portrayed by WirtschaftsWoche. He said SAP is essentially concentrating its development efforts on its HANA cloud application platform, of which Business ByDesign will become a part

Here is a more detailed quote from Dever:

We are taking a significant and innovative step forward by putting all of our cloud offerings on the SAP HANA Platform. Moving forward, SAP HANA will be the single, unified platform that enables businesses of all sizes across all industries and lines of business to run their entire business in the cloud more efficiently and effectively than ever before. SAP Business ByDesign will become part of the SAP HANA Cloud, and will continue to be supported and actively promoted in its current functionality and scope through our extensive partner ecosystem. Optimizing SAP’s cloud portfolio on our HANA platform means a dramatic price-performance improvement with all the benefits of simplicity in the cloud for all our customers. And SAP’s BYD customers have a clear roadmap to our future HANA powered tightly integrated Suite of business applications in the cloud.

Instead of making things clearer, I was now even more confused. 

There were two fundamental statements whose relationship to one another was unclear:

  1. ByDesign development would continue through the extensive partner ecosystem rather SAP.  
  2. ByDesign would be moving to the “HANA Platform”

The move to HANA was reinforced by a tweet from Vishal Sikka.

/wp-content/uploads/2013/10/image005_302238.jpg

During today’s 3rd Quarter 2013 results call for analysts, analyst Elizabeth H. Henlin tweeted the following information that cleared things up a bit:

/wp-content/uploads/2013/10/image006_302239.jpg

Note: If it this migration path is true, then some of the confusion is based on SAP’s often unclear use of the phrase “HANA Platform” – especially as it relates to the Cloud.  The quote in the one article refers to the “HANA cloud application platform”. In my understanding, the only platform that fits this description in the cloud from SAP is the HANA Cloud Platform (HCP) – SAP’s PaaS. 

If Elisabeth’s tweet is correct, then we are primarily talking about a change in hosting environments – this would perfectly fit a migration to HANA for ByDesign. One interesting consideration is the use of multi-tenancy in ByDesign and how this fits into the single-tenant environment of the HANA Enterprise Cloud. This migration would also represent a change in the role of HEC – the placement of ByDesign on the platform would be the first SaaS application running in this environment that I know of.

What I don’t understand is how the reduction in associated development efforts by SAP for ByDesign relates to this move. Will there be two version of ByDesign? A “classic” which is developed by partners and an “improved” version running on the HEC and developed by SAP?

I’ll be curious to see if other related cloud solutions (Cloud for Financials, etc) make the same move to the HEC.

My POV

For me, the timing of this story is unfortunate and will distract from other more important announcements at the TechEd. Perhaps, this announcement was intended as a part of the keynote at TechEd to demonstrate that the evolution of ByDesign continues and a tighter integration with HANA and other cloud solutions is planned; a positive message.  Now, SAP must deal with the impact of all the negative press about ByDesign – on existing but potential ByDesign customers and the ecosystem as well.

After criticism of ByDesign by the former SucessFactors boss Lars Dalgaard at the Sapphire in 2012, there were also rumors of ByDesign’s imminent death.   The product’s history demonstrates that it is like a cat with nine lives that always bounces back after such close calls. Yet, reduced development is not a sign of strength for a product.

I don’t have any further details about the shift to the HANA Enterprise Cloud time but it looks like ByDesign just might be a phoenix.  I’m just curious to see what emerges from those flames.

To report this post you need to login first.

19 Comments

You must be Logged on to comment or reply to a post.

  1. Jarret Pazahanick

    Hi Dick

    Nice job with this pulling everything together and like you agree this is unfortunate timing but ByD has always been high profile for SAP given they hype of past (ie “expect 10K customers) and the large investment SAP made in the offering.  It also appears to be partially self induced by either an internal leak for political purposes or a disgruntled employee especially given the timing as well as the specific details.

    One of the troubling things for me personally is the fact that it was widely claimed that SAP ByD had “over 1K customers” in 2011 and now the NY Times is claiming only 785 customers. Why this important is we heard on today’s earning call there are 2,100 HANA customers and 33M Cloud Users and are we supposed to “trust” these fully given the above.  It is a small thing but important if you ask me.

    On a side always enjoy your blogs.

    Jarret

    (0) 
    1. Richard Hirsch Post author

      I agree about the problems with such metrics – they often come different sources and it is usually difficult to figure out which one is correct.

      I’ve already blogged about those “cloud users” counts – I also view them with a certain degree of skepticism.  Yet, this is a problem of the broader enterprise software market not just SAP.

      D.

      (0) 
  2. Fred Verheul

    Hi Dick,

    Thanks for posting, clear story, nothing to add. Only question remaining (or at least the most important one) is reduction of development resources. Since you’re in Las Vegas this week I expect you to get some clarity on that too 🙂 .

    Cheers, Fred

    (0) 
  3. Torres Miguel

    I don’t understand the news about ByDesign using the HANA platform. The last release of ByDesign (1308), released in August, was available on both platforms, HANA and Max DB. The moving to HANA is not a new. So the new would be the reduction of development resources in ByDesign, and I can’t find any statement about that, just the information about the effort concentration on the new HANA cloud platform…

    (0) 
  4. Jose A. Hernández

    Very unfortunate comments out in the press, which is hurting a lot, both current ByDesign customers and the Cloud Channel partners that have been investing heavily in this solution.

    I’ve been working with SAP products and consulting for the last 20 years, and ByDesign is one of the best solutions I’ve seen EVER! Once you start working with it, you don’t want to see or work with a SAPGUI again. In fact, if you compare the depth of functionality of SAP R/3 when it was launched in 1992 and the functionality and so many other features of SAP Business ByDesign, the latest is so much deeper and better.  SAP ECC is like it is after 20 years of constant improvements, industry solutions, customers and partners enhancements, and billions and billions of $$$ in ABAP coding.

    However, I must admit a few issues with the ByD solution:

    1) Performance Issues

    2) Lack of vertical / industry flavors

    3) Difficult to integrate

    4) Poor maintenance & support – Some incidents took weeks to solve by SAP

    5) Internal competition. We had to struggle competing with SAP B1 and SAP AI1

    6) Lack of SAP Sales push to the solution. They would always prefer to sell on premise (more $$ to reach the sales quota) than subscription.

    I think poor ByDesign is the Black Swann at SAP!

    Now, my suggestion: when it comes out in the SAP HANA Cloud Platform, rename the solution to SAP R/4, and take the market by storm.

    Meanwhile, we, SAP ByDesign partners will cry and weave our nets as did Penelope waiting for Odysseus….

    My 2 cents,

    Jose

    (0) 
    1. David Rodríguez Díez

      Great comment Jose… It’s clear you come from a land with several great writers ! 😉 (A Machado, JL Hernandez, JR Jimenez)

      On the tech side, nothing to say to your comments.

      My  5 cents (in europe everything is more expensive) is that until the big customers begin to move solutions to the cloud on the core business (Sales, PM, etc…) cloud will not become a REAL priority for SAP.

      David R.

      (0) 
  5. John Kearns

    Dick,

    Thanks for putting together this article and in doing so, starting this great interaction between us Cloud partners.  I must admit that I was also very disturbed by the articles in the press and that the latest SAP partner FAQ does not do a lot to put me at ease.

    The statements that I am most concerned about due to their vaguery are:

    • SAP Business ByDesign will benefit by becoming part of the SAP HANA Cloud platform, and will continue to be supported and actively promoted in its current scope through our extensive partner ecosystem.   (what does “in its current scope” mean?  This suggests maintenance mode. I suggest SAP come out with a more clear statement around this.

    • SAP will continue to support the partner ecosystem and encourage them to develop application functionality on top of SAP Business ByDesign that will be supported by the development team responsible to maintain the products (expose APIs).    Is this to imply that the product will stay as is and only be extended by way of partner solutions?

    Once again, as a partner, I would appreciate more clarified statements be made to both the partner community and the buying public at large.

    John

    (0) 
  6. Grant Fraser

    Just finished the SAP Business ByDesign User Conference – a huge success, with 120 attendees – and full of ByDesign customers that feel like they made a great choice implementing ByDesign. 

    The article on the weekend certainly created a stir, but those of us close to the product are confident in it, and its future.  Certainly there are challenges, like any ERP product.  A lot of the  “issues” are actual people issues, where reselling partners, sales people and consultants want to hold on to large, complex and expensive on-premise sale and implementations.  

    We view the announcement to move to SAP HANA platform as positive – in a perfect world, SAP would have architect-ed the product flawlessly 10 years ago (with today’s technology…..) – thank fully, SAP has the vision and the resources to continue to innovate its products, and keep them current and relevant.

    As Jim Hageman Snabe said, “the suite always wins” –  at Navigator we continue to win with SAP Business ByDesign.

    (0) 
    1. Richard Hirsch Post author

      Grant,

      Great to hear that the conference went well. Can you provide some more information regarding the response of customers and partners to the “news”?

      D.

      (0) 
  7. Grant Fraser

    Hard to know what all customers and partners thought, or still think, but we had some top SAP people that were able to address this at the top of the conference, and explain how the information was wrong, and  how the real story is positive. 

    some customers were worried about disruption, but i reminded them if ByD was on premise, then replacing a database,  an application platform, etc would be concerning.  but in the Cloud, think of it as the power company is switching from coal to gas generators in 18 months, so there likely wont be any disruptions at all, and also any concerns we have now will be gone on the new platform.

    i think customer know that SAP has a reputation of taking care of their customers, and as I said, a vision for the future.  SAP is a software technology company – not an investment banker roll up of erp aquisitions – true software companies think and create the future –

    (0) 
  8. Grant Fraser

    the move to the new, better platform will take considerable resources, but SAP has them.  We expect to see at least part of that move complete by as early as February, 2014.

    (0) 

Leave a Reply