SAP Business ByDesign – Q&A for Solution Reseller
July 2010
What is the difference between starter packages and „normal“ SAP Business ByDesign?
These pre-configured systems along with packaged content and deployment services will enable
customers to start quickly with specific capabilities around general business, customer management or
professional services and to expand the scope to leverage the value of the entire integrated suite as their
company and needs grow. We will offer the packages at a minimum of 10 user licenses and a price that is
varying according to the scope. The packages will be available immediately. We are currently also
thinking about offering additional packages and will share details once they are available.
Why have you decided to create starter packages?
The SAP Business ByDesign starter packages have been designed and developed as an on-ramp for small
and midsize customers looking for an integrated, on demand business management solution.
What advantages does a partner have from selling starter packages?
The partner can give the customer the possibility of a phased approach into SAP business suite, an
approach which many customers prefer.
How can we differentiate the starter packages from SAP Business One? Does this mean that SAP
Business One will eventually disappear and replaced by SAP Business ByDesign?
ByD starter packages are fundamentally different from SAP Business One therefore are NOT replacement
for SAP Business One:
1. First of all, ByD and SAP Business One target very different customers in the market – today, SAP
Business ByDesign targets fast-growing small to midsize companies that demand a highly
scalable and adaptable solution to support their rapid growth yet prefer maintaining minimal-tono IT infrastructure. SAP Business One, on the other hand, mostly targets small businesses that
want to go beyond the typical “Quickbooks” limitations and to professionalize their business
with an “all inclusive” enterprise-class application. The starter packages do not change the core
target market for SAP Business ByDesign. Rather, they simply provide an easier starting point for
customers in the SAP Business ByDesign target market to embrace SAP Business ByDesign and
move on to its full potentials. For example, a venture-funded fast-growing company can now
start with 10 users from the beginning and quickly move up to 50 users as their business expands
rapidly.
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2. Second, it is important to recognize that SAP Business ByDesign, along with its starter packages,
are here to address the growing market interest in SaaS / On Demand deployment model and to
complement the On Premise solutions like SAP Business One. Considering the fact that most of
the SME market remains strongly biased toward the traditional on-premise & licensing model,
and SAP Business ByDesign is only currently available in 6 countries, it is clear that replacing SAP
Business One with SAP Business ByDesign will not be in anyone’s best interest, customers,
partners or SAP alike.
3. Third, SAP is the only global vendor that is truly committed to providing SME customers the
choice to best fit their needs, on premise or on demand. To that end, SAP Business ByDesign and
its starter packages are the perfect examples of how SAP continues to innovate and invest in its
SME portfolio to address the customer needs in the on demand market. Similarly, the new
release of SAP Business One 8.8 is the latest example of how SAP is taking its on-premise
solutions to a new level for SME customers. After all, the SAP winning strategy in the SME
market is to deliver different products to meet different needs, not replacing one with another.
We hear that you are now also engaging the SME teams to sell SAP Business ByDesign – will this make
any difference for us?
Not at all. Customers want to buy from a partner that is a trusted advisor. Based on their domain specific
expertise, that help customers grow, our partners provide these services to our customers. We are fully
aware that partners are key to success in the on-demand model to better service our customers, keep a
close customer relationship and expand the solution’s market reach. By leveraging our partners’ domainspecific know-how we will be able to jointly fulfill our customers’ requirements even faster.
Does this change the goals in customer numbers you have for 2010?
We are focused on bringing the next versions of SAP Business ByDesign to the market mid and end of
2010 and we want to make them successful. As we execute these goals, we will continue to share proof
points of our success with you.
Will SAP Business ByDesign now be available in all countries?
SAP Business ByDesign is already available for productive use in Germany, US, UK, France, China and
India. We will announce specific geographic expansion plan later this year.
Can you already share a country roadmap beyond 2010 with us?
We will expand to additional countries in early 2011. We will announce specific geographic expansion
plan later this year.
What type/kind of partner are you looking for?
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Partners will extend the value SAP Business ByDesign delivers to customers by reselling, providing
additional services and building complementary solutions and industry specific applications using our
cloud-based development environment that will be delivered with one of the next versions. In a first
step, we are mainly looking at working with sales and implementation partners and solution partners.
Under the category of sales and implementation partners, partners will market, sell and deploy SAP
Business ByDesign.
Solution Reseller: With the next SAP Business ByDesign feature pack, SAP will offer reselling contracts to
the partners we worked with since the launch of SAP Business ByDesign. Partners will sell SAP Business
ByDesign subscription and deployment services as well as holding customer contract. Solution resellers
will not only sell and deploy SAP Business ByDesign, but also offer additional services such as office
management services, consulting, change management or data migration.
Referral partner: In addition to that, partners can continue to refer customers to SAP Business ByDesign
as part of the overall SME referral program (e.g. industry organizations).
We are looking to expand our engagement models with partners to provide further flexibility to
customers and partners as we proceed with the program.
Solution Partner: Enhance SAP Business ByDesign with features, functions, services or build complete
industry verticals on top of SAP Business ByDesign.
Web Service Providers (link to web services including Google Maps, Hoover or Mapquest.com). We
already have agreements with web service provides since version FP 1.2
Complementary Software or Services Partner: They integrate third party solutions and services via
standardized web services. We have already announced such integration for FP 1.2 and FP 2.0.
Add-on Solution Partner: They build additional features and functions, forms and reports on top of SAP
Business ByDesign to fulfill customer requirements which are not covered out of the box. They are
leveraging the cloud-based development framework which will be available with one of the next versions
of SAP Business ByDesign – however, SAP is already testing the framework jointly with selected partners.
Micro-vertical solution partner: They build complete industry-verticals on top of SAP Business ByDesign
leveraging the cloud-based development framework
What conditions must a partner meet to become a SAP Business ByDesign partner?
We are looking for strong partner engagements and as such we have a clear criteria catalogue for
solution resellers to be matched against to ensure highest possible transparency and healthy growth for
our partners. Must criterias are expertise in target segment, financial stability and portfolio fit, other
important criteria being the partner profile and SaaS experience, strategic relevance of SAP Business
ByDesign within the overall partner offering. Another important aspect is that partners contribute jointly
with SAP in expanding the reach of the market and ensure greater scalability. Eventually, each
partnership will be evaluated by SAP on a case by case basis, again applying highest possible
transparency for all participants.
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When will SAP start with partner recruiting activities (for countries which are not in the 2010 focus)?
In the second half of 2010 we will continue creating a vibrant ecosystem of solution reseller and solution
partners in the six SAP Business ByDesign key countries and for this we are open for collaborating with
strong partners out of our existing ecosystem as well as with new partners. It is too early to share any
plans regarding additional countries and we will come back with this detail as soon as possible.
What are the expected investments of a partner?
We are committed to customer satisfaction and partner success and are enabling our partners to
provide services to our customers including subscription, deployment, or other services such as business
consulting or data migration and own the customer relationship (solution resellers), integrate third party
offerings or build and deploy solution extensions with our cloud based development framework which
will be available with one of the next versions (solution partner).
We are very much dedicated to establishing a thriving ecosystem around SAP Business ByDesign and as
much aware that we thus need to equip partners with compelling opportunities to grow their business
around SAP Business ByDesign. For solution reseller in 2010 we see revenue sources through
subscription, implementation and additional partner services. We have therefore worked on the
appropriate criteria for a partner business model which ensures high customer retention rates and the
sustainability of the partner business as well as proper lead generation through marketing activities. In
addition, it helps partners overcome the initial investment phase with limited cash-flow which we expect
for the first year.
To reward our early partners and fully on-board them we give discounts for the first year of net new
business and for subscription renewal. In addition to that partners will also receive a very high Market
Development Funds (MDF) for new business. We will also offer partners with Business Development
funds (BDF) in the ramp up. For the MDF and BDF funds allocation SAP expects our partners to deliver
against jointly defined activities such as marketing, business development or other activities. Other
discounts for additional services provided by SAP are granted for services from SAP Service centre.
Finally we see additional revenue opportunities in the development of add-on functionality/solutions
which is open with beginning of 2011. To explore this opportunity partners have to qualify for the
solution partner program.
Which is the training volume/effort for partner employees?
To support our partners we are offering dedicated on-boarding support, for sales, presales and project
deployment. We also support partner business with specific marketing and sales programs, joint
business planning as well as support in promoting first partner reference customers.
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Does the partner have to build up a dedicated department for SAP Business ByDesign or dedicated
resources? If yes, which ones
A solution reseller has to clearly focus on volume business and move from project driven approach to a
transactional business. In addition, the customer relationship needs to be even intensified to ensure
renewal in the on-demand world. We expect from our partners a dedicated, separate business division
to support the SAP Business ByDesign business.
Does the partner need specific know-how in the area of Financials?
SAP Business ByDesign delivers a complete, integrated suite to meet and grow with the needs of midsize
companies, easy to deploy and use, with embedded help functionalities. However, a financial
background is clearly beneficial.
How long does it take for a partner to become profitable with SAP Business ByDesign?
This depends on the growth path of the individual partner. The faster the partner scales in volume and
increases its customer base, the faster he will enter profitability. On average however, we expect that a
partner can be positive in the second year and continue to lay a foundation for success in the on-demand
world. As we are very much aware of this typical curve we provide support to our partners by e.g.
offering a discount model which is focused on revenue and renewal incentives. While we are determined
to create an environment for the partner to grow his business, we also expect the partner to set his
business systems up for volume and work on drivers impacting the margin at the same time – just like
SAP did for its SAP Business ByDesign business. If this prerequisite is not given the partner will struggle to
become successful within the on-demand business.
Which competitors offer SaaS and hosting today?
Of course we are well aware that we are not the only company offering an on-demand solution to the
midmarket – but most of the other vendors like Workday or Salesforce have decided to focus only on
one piece of the puzzle (HR or CRM) and not an integrated suite. The only competitor we see striving for
an integrated offering as well is NetSuite.
SAP Business ByDesign, unlike NetSuite, is a complete enterprise solution that addresses end-to-end
business processes across all business functions. ByD surpasses NetSuite in usability, performance,
flexibility of deployment and comes with natively embedded analytics. In addition, NetSuite lacks depth
of functionality in professional services and manufacturing – areas SAP Business ByDesign currently
targets.
We designed SAP Business ByDesign to be based on the best practices SAP has collated and selected in
developing ERP solutions over the past 35 years. We are observing that we are increasingly winning
against NetSuite and are quite confident that this success will continue after the product is broadly
released.
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How do you position SAP Business ByDesign versus SAP Business All-in-One and SAP Business One?
Partners are key to our success in the SME space to expand the reach of our solution portfolio and serve
as trusted advisors to our customers. Customers will continue to look for both on-demand and onpremise solutions and just as we establish our on-demand ecosystem we continue to expand our
ecosystem around SAP Business All-in-One, SAP Business One and SAP Business Objects where we
strongly rely on co-innovation capabilities as well as strong industry know-how.
While innovation can be delivered faster in the on demand world, customers have to agree to a greater
solution standardization as intense customization does not scale and would thus reduce the advantages
of on-demand. In the on-premise space partners can fulfill more individual customer demands by indepth customization.
Partners in the on-demand world have to put an extremely strong focus on the customer relationship
and offering additional services to keeping customers and differentiating from other partners in an
environment that allows for fast change.
What kind of support will SAP provide a partner?
We are providing support for on-boarding of partners as well as marketing, sales and enablement
support. To help partners getting started we are providing an on-boarding guide, organizational set-up
support, joint business planning and an on-boarding program to help get a partner to the first customer
in approximately 90 days. We also provide an e-learning platform with role based curricula, access to golive-experience workshops and self-enablement systems as well as a central SAP Business ByDesign
knowledge repository on the SAP Business ByDesign Business Center. In addition, free support in closing
the initial deal, as well as free coaching service for first partner-led implementation projects are part of
the support offering. From a sales and marketing program perspective we are looking at on-boarding
discounts, discount on software and market development funds as well as support for assets like
collateral and reference stories. We will also provide a demo system per partner for the industries
Service Provider and Manufacturing. To support deployment of SAP Business ByDesign we are looking at
providing a SAP Business ByDesign deployment methodology as well as standardized services with tools
like accelerators and workshops and technical services initially provided by the SAP Service Center at a
discount.
How will SAP support the partner with marketing activities in SAP Business ByDesign?
Partners get a very attractive and sustainable business discount for new subscription business and
renewal. They also get BDF and MDF funds to support them to build up their business. Market
development funds are earned based on the generated revenue. Business development funds are start
up benefits granted by SAP. Both funds are associated to clear give & gets.
What does SAP expect from a partner in terms of marketing activities for SAP Business ByDesign?
Partners do register leads through our partner lead registration tool. This is very important to ensure full
transparency on partner lead pipeline and secure pipeline of respective partner.
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How can an existing SAP partner qualify a lead and find out if it is suitable for SAP Business ByDesign?
We have a detailed sweet spot analysis, which we provide our channel partners, as well as an ideal
customer profile, which are part of our sales package for partners.
Can a partner host the solution himself?
For now SAP will be hosting the SAP Business ByDesign solution. However, over time we expect that also
partners will be offering SAP Business ByDesign as a hosting service.
Will SAP Business ByDesign Studio (former name: Solution Development Kit (SDK)) be available? If yes,
when?
SAP Business ByDesign Studio will be available with FP2.6 in early 2011.
Can every partner develop vertical solutions with the SDK?
Every certified partner will be able to develop vertical solutions with the SDK.
What are the target market and the target industries for SAP Business ByDesign?
Jointly with our partners we are currently focusing on professional services providers and light discrete
manufacturing. We are currently evaluating additional industries and will share this information when
available.
Is it possible to request a test-account/test-user to peak into the product?
Through SAP, you can request an invitation to a SAP Business ByDesign test drive. In order to support
presales activities for SAP Business ByDesign, the SAP Business ByDesign team provides you with a smart
demo application that empowers you to get unattended first hands-on experience with SAP Business
ByDesign. You can choose between interactive recording and a live system. It is recommended to consult
with a SAP Business ByDesign consultant/sales person during the Test Drive and typically have a high
quality internet connection. Typical uses are at events and trade shows with an SAP or partner presence.
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