SAP on Monday announced the 2.6 release of its SaaS (software-as-a-service) suite Business ByDesign, which contains a highly anticipated SDK (software development kit) that partners will use to create extensions and add-ons.
Observers, as well as SAP, consider the SDK crucial to ByDesign's success. "If we can get this out ... and allow these partners to grow profitably, we are potentially sitting on something really, really fantastic," said Chris Horak, global head of ByDesign marketing.
One industry analyst agreed, albeit with a caveat. "The most important thing right now for any software company is making sure they have a strong developer ecosystem," said Ray Wang, CEO of Constellation Research. However, the tools have to be good, he said. "[The SDK] has got to grab people."
In good news for SAP, "early indications from some of the partners is that it's definitely easier to use than NetWeaver [SAP's main technology stack], but you still need some training and SAP knowledge. For people schooled in SAP, it's a much more productive environment than NetWeaver," Wang said.
SAP first announced ByDesign in 2007, but later scaled back the rollout of the software while it worked to ensure it would be profitable at scale.
Some 250 customers are now using ByDesign, and that number should grow to 1,000 this year, SAP has said. That represents a much less ambitious goal than the original one of 10,000 customers and US$1 billion in revenue by 2010.
SAP won't be able to drive enough demand to reach those thresholds without a strong partner program, which will uncover what customers really want from the product, suggested independent analyst Jon Reed. "A lot of the most important industry add-ons are going to come directly from customer feedback and need."
So far SAP has about 50 ByDesign resellers and 40 development partners, according to Horak. The company is proceeding slowly in order to ensure the right mix of companies are involved and all the add-ons that get developed are supportable, he said.
SAP is anticipating a range of development scenarios for ByDesign, from more complex "micro-vertical" applications to alternative user interfaces.
It will depend on the situation whether SAP or a partner hosts the add-on functionality, Horak said. "If they are leveraging our data types, it makes sense for it to reside on our blades."
ByDesign will also serve as the underlying platform for on-demand applications aimed at large enterprises, although efforts in that area aren't set to ramp up until later this year.
Other aspects of the 2.6 release include iPad and BlackBerry support, as well as a focus on selling it into subsidiaries of large enterprises. This represents a change from SAP's original positioning of ByDesign for small and medium-sized businesses, and could be seen as a response to companies such as NetSuite, which has gone after similar business opportunities with its on-demand ERP (enterprise resource planning) software.
ByDesign customers will gain some analytics capabilities as well in 2.6, which are powered by in-memory technology, Horak said.
Pricing for ByDesign starts at US$149 per user per month. As for partner-developed software, SAP has finalized a revenue-sharing model but is not yet sharing those details publicly, Horak said.