While SAP AG is launching an on-demand CRM (customer relationship management) application for the enterprise that will compete with hosted incumbents such as Salesforce.com, the German enterprise software vendor is betting its ability to offer a seamless on-demand and on-premise experience that standalone players can't match will allow it to capture a big piece of the enterprise pie.
SAP took the wraps off Sales OnDemand Tuesday at the Cebit show in Germany. It's built on top of the platform that underlies Business ByDesign, the midmarket on-demand ERP platform the vendor created from the ground-up for the hosted market. Sales OnDemand is part of a series of on-demand applications SAP is positioning as extensions to its on-premise ERP systems.
It's that ability to marry on-demand and on-premise that will set SAP apart in the market said Robert Courteau, president of SAP North America. In an interview at SAP's Partner Summit in Savannah, Ga., Courteau told ComputerWorld Canada that in the enterprise space, companies don't want to move everything to the cloud. Citing data from Forrester Research, he said in five years, 70 per cent of enterprise applications will remain on premise.
What will move to the cloud, he said, are single-process applications that are less complex. This opens up a piece of the market that hosted-only players can't reach, with companies not wanting to juggle and integrate multiple vendors across consumption channels.
“That's where you'll see Salesforce.com, but what we're going to do is make sure you can move these single-thread applications to the cloud, but also get the benefit of the orchestration layer to tie it back into your SAP back end, said Courteau. Not everything will go to the cloud, but you can move sales or human resources to take advantage of it. And by marrying mobility, it will be the best of three worlds. SAP is also planning to deliver native mobile support for iPhones, iPads, BlackBerrys and Android devices. Where the bulk of the growth will be in enterprise mobility, said Courteau, is in machine-to-machine data. It's not just about placing an order from a smart phone, but collecting data from machines, from vehicles, and tying it back into the backend for real-time analytical analysis.
Sales OnDemand, which is scheduled for general availability in the second quarter, will be joined this year by applications for expense management and human resources, according to a statement. Pricing has not been finalized but will be "very competitive" with other offerings in the market, according to the vendor.
Sales OnDemand is not, at least for now, a full-fledged replacement for SAP's existing CRM software, which is available in hosted form but usually deployed on premise, said analyst Ray Wang, CEO of Constellation Research.
"At the beginning, I would say it will have 20 percent of the full suite. But that 20 percent is what people use 80 percent of the time," he said.
"This is a sales tool for sales people," he added. "Part of the problem most people face in terms of (CRM applications) is they've been designed for managers, (who) want things tracked and reported. This does that in a much more natural way ... It's a very sexy product."
Big data, little data Industry specialization will continue to be a differentiator for SAP, said Courteau, but increasingly important will be the ability to leverage data at both a macro level and a micro level. He describes it as big data and little data. Big data is how historical sales patterns and weather forecasts will impact supply chains. Little data is how the individual customer changes the picture.
He mentions a smart phone app SAP is building with a grocer where a shopper will walk into a store with a shopping list. That list ties right back into the grocer's supply chain so they can update inventories, and they can also push coupons to the customer based on the season, their list, and what stock they need to push, as well as gain a little customer loyalty.
“We need to serve up data that's both macro and micro in nature,” said Courteau. “This is how were going to get to a 20 billion Euro company, and it's going to be big.” Already, last year analytics made up nearly half of SAP's license revenue in North America, and the vendor has plans for more growth in the space in 2011.
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