Let me start this blog post with a huge disclaimer: I have no intentions of wilfully beating up on SAP whatsoever!
Sure, the enterprise applications titan has lately been embroiled in an intellectual property lawsuit with archrival Oracle over improper use of support data through its TomorrowNow third-party support (recently discontinued) subsidiary.
As if this wasn’t enough, SAP is being sued again, and this time over an allegedly failed software implementation. Namely, in late March, Waste Management Inc. filed suit against SAP with claims of fraud (or gross over-promise, if one wants to sound a bit gentler here).
The plaintiff company claims to have spent a whopping US$100 million fortune implementing SAP’s software to run its business out-of-the-box (i.e., without any costly and pesky customizations). Since the software was allegedly a “complete failure”, the company is seeking expenses plus additional damages.
And it is all coming down in the midst of internal changes and reshuffling in SAP’s leadership and some high-profile staff departures. There are also indications about a not so smooth integration and assimilation of recently acquired Business Objects.
And yet, we’re a long way off from reading SAP’s obituary any time soon. SAP is the market leader for a reason, and I have a great deal of respect for its team and its ability to weather such storms.
It is not my intention either to crow over SAP’s apparent hiccups and acknowledged delaying (with decelerated investments) its much publicized software as a service (SaaS) offering called SAP Business ByDesign [evaluate this product].
SAP Business ByDesign is SAP’s first major foray into on-demand software delivery, whereby the company hoped to open a new market for its applications. Prospective customers would be companies that cannot afford its high-end applications, SAP Business Suite [evaluate this product], but which require more sophisticated software than its small business offerings, SAP Business One [evaluate this product].
The enterprise resource planning (ERP) giant had quite ambitiously hoped to attract 10,000 users and US$1 billion in revenue with SAP Business ByDesign by 2010. In addition to its commitment to SaaS, the on-demand product represents SAP’s indisputable commitment to the mid-market. In 2007, SAP set the lofty goal of 100,000 total customers, also by 2010. Growing from its current base of 35,000 will naturally require that a sizable number of small and midsized businesses join the fold.
But SAP’s outgoing chief executive officer (CEO) Henning Kagermann recently told investors that the company was now unlikely to hit that target. One would think that such a renowned (and regimented) company would have first conducted a little more research into what customers and partners really wanted, before chancing its neck and so publicly “betting the company” during the on-demand product launch and fanfares in the last fall.
And apparently the much-discussed ambitiously comprehensive on-demand feature list now looks somewhat incomplete, making some observers to be unsure whether it’s all more about vaporware or vapor-demand. The official SAP party line, according to the related official information extracted from the Q1 2008 earnings press release, can be seen below and you can draw your own conclusions:
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