• July 10, 2006
  • By Marshall Lager, founder and managing principal, Third Idea Consulting; contributor, CRM magazine

A Praxical Move for SAP

SAP has completed its acquisition of Praxis Software Solutions and is adding the former partner's e-commerce and Web portal capabilities to its SAP Business One management suite, the company announced today. SAP will integrate Praxis personnel and technology into its Business One operations as part of an ongoing process of fill-in acquisitions. Two main components make up the additions that SAP will integrate with Business One through this deal. NetPoint Commerce, an integrated e-commerce application that can support both B2B and B2C traffic in the same store, works off of existing SAP Business One databases. NetPoint Focus, an on-demand extension of Business One CRM functionality, adds campaign management and prospecting in addition to delivering a Web-based option for users. Both products are already available as extensions to Business One, but will now be integrated directly into the suite in order to build up SAP's hybrid delivery model. "Praxis has been a longstanding ISV and partner with Business One," says Dan Kraus, vice president for SAP Business One. Kraus notes that Praxis has about 115 customers already using its software, and has been an "SAP Business One Partner of the Year" two years running. "We've been looking at this move for a long time, and Praxis will add a number of attractive new functions for our customers." The takeover of Praxis may come at an opportune time, as recent Yankee Group research indicates that integrating the company Web site with other business applications is one of the most important concerns among small and medium enterprises. "Integrated front office and back office are the core pieces that are required to run an SME efficiently," said Sanjeev Aggarwal, senior analyst for SMB strategies at Yankee Group, in a previous statement. "Integrated e-commerce plays a key role in increasing the productivity and overall efficiency of the workforce for SMEs." Despite the timing, analysts realize that SAP's acquisition and eventual integration of Praxis is not a panacea, but rather a competitive move to retain market share. "SAP has bought an upsell [with NetPoint Commerce], that's it," says Gene Alvarez, vice president of CRM for Gartner. "NetPoint Focus is also an upsell in some cases." Alvarez says that both are essentially product enhancements that would not be compelling by themselves. "I don't picture many customers buying either one alone; there are a number of good standalone Web stores out there, and if I have Business One already, I don't have to go with [NetPoint Commerce]." While SAP has excellent brand recognition, it will be trying to capture a market segment that is already stirred up and has established brands of its own. "SAP hopes to have a hybrid delivery approach, selling the on-demand component to those customers who already have Business One. The challenge is that another company already exists that has integrated CRM, back office, and e-commerce: NetSuite," Alvarez says. The capabilities that SAP adds with the Praxis acquisition still make it a more compelling prospect for SMEs looking for integrated CRM, and the Web interface makes Business One a more credible choice. Things are starting to heat up in the SMB arena," Alvarez says. "On-demand has gotten the attention of the midmarket." Related articles: For CRM, ERP, and SCM, SAP Leads the Way
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