SAP Business ByDesign, SAP’s cloud based mid-market ERP offering doesn’t get a lot of love in the market or, for that matter, at SAP. Competitors poke fun at it and until it can command a perceived valuation of at least €1 billion, will likely be left to toddle along with relatively little by way of marketing resource. That’s a great pity in my opinion.
Regardless, this week I took the opportunity to wheel Rainer Zinow, the one consistent champion inside SAP for ByDesign, into our video room, and put him on the couch for the product’s annual checkup.
As background for those unfamiliar with the history, Zinow and I go back to 2007, when SAP launched ByDesign to much fanfare. I was an instant fan. I remain a fan.
Shortly after putting the solution into market, it was withdrawn to undergo open heart surgery. While the solution had the bones of an acceptable offering, it was stuck in a form of dwarfism that prevented it from scaling. Eighteen months later and ByDesign re-emerged; fitter, leaner, healthier and ready to take on the world.
All seemed to be going reasonably well until Lars Dalgaard got his paws on it and very nearly shredded the solution, much to my dismay. Fortunately, that near death experience didn’t prevent the ever keen Zinow from making sure that ByDesign had enough oxygen to survive. This time last year I reported that:
''I am pleased to see BYD come back into market since I was one of the very first to put time into understanding the solution and saw its potential as a player in its chosen space. I still believe there is a place for BYD.
Competitors might wish to remember that SAP still holds considerable sway among a very large number of customers and that will help SAP in deals.
As always, the growth proof will come via the customer conversations which I have urged SAP to bring into the public domain, coupled with SAP’s ability to execute on multiple fronts.''
I got some of what I wished for but not all.
Over the last year, SAP has improved the product where it needed to for customer and vertical market needs. I wouldn’t say there have been blockbuster changes but instead, SAP has followed the market and benefitted accordingly. Zinnow generously shared metrics which he said I can publish to the wider world.
The numbers may not seem spectacular in the scheme of things but they are indicative of a division within the company that is reaping the benefits of a much larger ecosystem of customers that surround it and for which ByDesign is turning out to be a good fit for a broad based system of record.
Crucially, Bernd Leukert, who commands the SAP development purse strings, has blessed ByDesign as SAP’s mid market cloud offering, and given Zinow important resource with which to undertake fresh technical updates, including a move to HTML5 and away from Silverlight.
SAP has learned a great deal about how a cloud ERP system should be implemented, the degree to which partners can take the solution on board, and how to drive success, using a ‘land and expand’ strategy. That last point has helped SAP lift deal size and, in some cases, close out seven figure contracts. I can think of a few vendors who would dance a frenetic Irish jig to report the same.
There has been some talk that S/4 Simple Finance will be the replacement for ByDesign. That doesn’t make sense. ByDesign is a mature solution for a specific market segment that S/4 cannot address at the price points ByDesign offers. In short, there is a clear market for ByDesign and it is serving that purpose.
One interesting note worth watching for on the video; Zinow says that once users understand how to get the best out of ByDesign’s native reporting, they love it. Having an Excel add-in certainly helps as does the consistent UI. In short, small and mid-sized customers can ‘travel’a long way with this solution.
I still want to get in front of customers but can be content with the fact that those we were talking about last year are doing just fine and re-upping their subscriptions.
As always in our conversations, Zinow is refreshingly honest and straightforward in his assessment of the solution. That alone is worth your time investment in watching our conversation because that kind of genuine yet calm passion is a rarity in our industry.
As an aside, and something we did not get into during the video recording, Zinow told me other parts of SAP have fed off the work that went into ByDesign’s architecture to assist in developing wholly new products in the customer experience area. So it can’t all be bad.
I’ll check in again, hopefully before another year has passed. In the meantime I will leave readers with this tantalizing prospect. Based upon what I have been told, inquiries around the market and conversations with colleagues, ByDesign remains an unsung story. But, I am betting that by 2017, SAP will wake up and start putting some serious marketing muscle behind it. Because by then, I am forecasting that ByDesign will be very close to that magic €1 billion valuation.