As the end of the first quarter approaches and along with it the previously scheduled release window for SAP AG’s all new SMB application, the company has revealed that it has delayed the launch.
Although the product, which is known as A1S, is being tested by customers, SAP said it was not yet ready for release. The launch date has been pushed back to Q2, with a marketing campaign slated to begin in May.
SAP is pinning high hopes on A1S, which it describes as SOA by design. It is intended to slash the cost of ownership for small and mid-sized companies by 90%. It is expected to play a critical part in helping SAP attain its goal of growing its customer base to 100,000 from the current 39,000 and expanding its addressable market to $70bn from today’s $30bn, by 2010.
CEO Henning Kagermann believes that unlike SAP’s existing small and mid market products – Business One and All-in-One – A1S will have the ability to draw in thousands of new customers per year.
The sales channel and deployment model are being designed for volume sales. Telephone sales has been identified as a key channel and initially the product will be offered as an online service. An an premise deployment options will be available later on.
When the product does appear, its SaaS nature will mean its main competitor will be NetSuite, the established SaaS-only provider of integrated ERP and CRM applications. Neither Microsoft Business Solutions nor Sage Group have got their SaaS acts sufficiently together to offer anything more than isolated on-demand applications, primarily in the CRM area, while Salesforce.com gave up on the idea of developing its own back office billing, invoicing and order management capabilities several years ago.
It looks like building a web-native, ERP-based suite from scratch is a bit harder than SAP anticipated,’said NetSuite CEO Zach Nelson.
And for those of you that are keeping score, SAP’s delivery date change and Microsoft’s strategy change are both reminiscent of Salesforce.com’s aborted attempt to build a complete application suite. Way back in Q4 ’02, when we added rich CRM to NetSuite, Salesforce.com said they would add ERP to rival us in a new product called the ‘Salesforce.com Billing Edition.’ Salesforce.com’s original shipment date of Q4 ’02 quickly slipped to Q1 ’03, and then to Q4 ’03 and as we all know, more than 4 years later, we are still waiting for this mythical ERP addition to the Salesforce.com’s CRM-only product line, he said.
Microsoft has recently appeared to distance itself even further from its early promise of a single code base for its Dynamics products, focussing on unifying the user interface and easing integration through the use of foundation technologies like SharePoint Server 2007 and building an SOA implementation and using web services.
Now I don’t know if SAP will fail to the same extent as Microsoft or Salesforce.com in building a complete on-demand business suite, but clearly they are beginning to appreciate the challenges inherent in trying to duplicate NetSuite. I guess the moral of the story is it is much easier to announce how you are going to compete with NetSuite than it is to build a product that actually does, he said.