SAP Business ByDesign is determined to succeeded

In the last 2 days I made an extensive research on SAP Business ByDesign product. As you already probably know, ByD (short name of the solution) is cloud solution offered either directly by SAP or by their channel partners. Cloud solutions are relatively new business to SAP in their 40 years history and they made a decision to host Business ByDesing only at their own data centers for a while. With this this movement they will acquire the necessary know-how to run the most important tool for every company on their cloud, before they give it to the their partners. It makes huge sense and I appreciate their precaution.

Let’s move back to the main part why Business ByDesign is determined to succeed. Look at the following short video which will give overview about the UI and sexy features. You should bear in mind that while you will see some hot features, ByDesign solution is not limited to them.

SAP Business ByDesign started development many years after SAP already had a ton of experience, knowledge and probably vision how one business solution should look like. It is broadly known that when you have skills and knowledge, it is much easier to make a good solution of you make it for 2+ time. Try to remake your “state of the art” spreadsheet and I am sure that you will do it better than the first time.

There are three things that make Business ByDesign great:

• User-friendly UI
• Competitive functionalities near great to the SAP top product
• Amazing implementation tools which helps in scoping, configuration, migration and testing phases. You could find more about them in following SAP document – Business Configuration.

Now I am going to share with you some very rough pricing offers based on the SAP configuration tools. We will compare the top preconfigured solution – SAP Business All in One and SAP Business ByDesign. Let’s assume following scenario:

Industry: Manufacturing

Employees: 100

Users: 30

SAP Business All in One Solution Configurator (This service is not available as at 6th of June 2014)

SAP Business ByDesign Solution Configurator (This service is not available as at 6th of June 2014)

What we see here is that the total costs for the on premise solution is 290 800 USD compared to 208 000 for the ByD. From the calculator of Business all in One I found that one additional user costs 5200 USD. That means that if we multiply the 30 users by 5200 $ we could result in separation between user licenses (156 000) and hardware + consulting (134 800). It is known fact that SAP is charging between 18 and 21% from the initial user licenses per year for maintenance and upgrades.

Total cost of owing SAP Business all in one

• Initial Investment – 290 800
• Annual licenses – 28 080 (156 000 x 0,18)
• Salaries/External costs for maintenance and backups for the server
• Salaries/Consultant costs for performing SAP upgrades/localization
• Hardware upgrades and maintenance
• Longer implementation time

Total cost of owing SAP Business ByDesign

• Initial Investment – 208 000
• Annual subscription – 38 600 
• No additional costs for maintenance
• No additional costs for upgrades/localization (Automatic)
• No additional hardware costs
• Shorter implementation time resulting in less investment of time from your employees and middle management

I am definitely not an expert of SAP pricing, but no matter how approximate are the calculations, the cloud solution will be definitely cheaper then the on-premise solution.  When we start to counting the hidden costs the picture will became even more obvious in favor of the ByDesign.  In addition to the costs I assume that the ByDesign solution needs less training for the end-users, because the user interface is much more user-friendly than the one in SAP Business All in One where the learning curve is much longer.

I could assume that ByD will have a much more cheaper options for new features  in the future based on the possibility of selling apps in SAP store just like the developers are doing it on Android and Apple Stores.  When you buy it, you will have it on your instance in 2 hours which sounds great at least on paper. With the fact that it is receiving upgrades 4 times per year with new enhancements and requested functionalities by their customers makes it even greater.

In summary, I would say that SAP Business ByDesign is perfect solution for small and midsized companies which accepts the “inconvenience” of storing mission-critical information on cloud manged and assured by the top business solution supplier in the world. Inconvenience is in the quotes, because hosting it on your side is either not less riskier or too expensive for SME. You could read also following document explaining the security measures that SAP is taking.

I will follow the news around the SAP Business ByDesign in the near future, because it sounds and looks impressive based on facts and information which is freely distributed over the internet. I will be really glad if I could find a way to play with it for several hours or days :).