ByDesign, SAP introduces on-demand business

Enterprise software giant's midmarket-focused service to compete with those of Salesforce.com, NetSuite and Oracle.

Enterprise software giant SAP on Wednesday unveiled a midmarket on-demand service, Business ByDesign, putting it in competition with the on-demand offerings of Salesforce.com, NetSuite and archrival Oracle.

The service aims to not only expand SAP's reach into the midmarket, but also to mark its entry into the hosted-applications arena, where it has been slower than its competitors.

Business ByDesign will offer a range of on-demand applications, from financials to procurement to customer relationship management (CRM) software via a dashboard. The monthly service is set to cost $149 per user, per month, for customers with a minimum of 25 users. Customers that require limited access to the software, such as self-service entry for purchase confirmations, will be $54 per month for a set of five users.

"I have been at SAP for 25 years, and this is the most important announcement I have made in my career here," Henning Kagermann, SAP's chief executive, said during a press conference in New York. "We designed this product to launch a new business model. It's a new way to design, develop and implement business software."

The midmarket, Kagermann said, includes companies with a staff of approximately 100 to 500 that do not have, nor want, a sophisticated IT department to run their business software. He noted, however, that SAP midmarket customers serving a deep niche within an industry would likely forgo its ByDesign offering.

SAP currently has 20 customers that are involved in ByDesign's pilot in the United States and Germany, and it is validating its service with customers in China, France and the United Kingdom. The company plans to expand its customer base in these regions throughout the year, with plans next year to enter additional markets in Australia, India, Italy, the Netherlands, the Nordic region, South Africa, Spain, Canada and Mexico.

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