SAP Declares "ByDesign Is Here" (Sort Of)

ORLANDO, FLA. — Just 100 days ago, German software giant SAP was in a state of flux. The company had just ousted its chief executive officer, Léo Apotheker. The highly anticipated and long-delayed on-demand version of its enterprise software had yet to be released. Quarterly performance had suffered. Hikes in maintenance fees were being proposed. The company's chairman, Hasso Plattner, was driven to plead with customers to trust SAP.

A lot can change in 100 days.

On Day Two of the company's SapphireNow Conference here this week, Co-CEOs Bill McDermott and Jim Hagemann Snabe delivered back-to-back keynotes addressing the company's $5.8 billion acquisition of Sybase and its much-delayed launch of the on-demand offering Business ByDesign 2.5.

[Editors' Note: Additional coverage of SapphireNow '10 is available on destinationCRM (here) and destinationCRMblog.com (here and here).]

McDermott opened his remarks by detailing the external forces causing businesses to change the way they are run. Globalization, industry consolidation, and massive amounts of data are not only changing how decisions are made, he said, but also how companies interact with each other.

McDermott said that, in his conversations with business leaders, three themes had emerged as a direct result of these changes:

1. Businesses are trying to operate in real time;
2. they are trying to operate in an "unwired" fashion; and
3. they are trying to become sustainable.

The ability to analyze data in real time was a significant reason SAP acquired Sybase, whose in-memory computing will allow SAP to become what McDermott called a "game-changer."

"The volume of data in the world doubles every 18 months," he said. "The opportunity of the century is to create insights out of all this data...a technology like in-memory computing...allows billions of records of data to be analyzed at the speed of thought."

McDermott mentioned China as an example of a market that has become unwired. Consumers there, he claimed, have skipped the PC generation altogether. SAP's view is that the world is going mobile and that business users are going to want to remain connected to customers and each other at all times.

This, McDermott told attendees, was the rationale underpinning the Sybase deal. By leveraging Sybase's mobile platform, SAP intends to make its software available on all devices at all times and in all locations.

"This is about extending [the] end-to-end processes closer to the point of action," McDermott said. "Real value comes when [a retailer] can extend [its] storefront to an m-commerce site. By being unwired you can give access to your customers at any place at any time...either you do it or someone else will do it for you."

Sustainability was also a key issue in McDermott's keynote. He cited Lexmark, a company that was able to slash energy costs by 25 percent, thereby lowering greenhouse gases and also saving $7 million.

"Leaders build companies that last," he said. "And best-run businesses are sustainable businesses."

McDermott's counterpart, Hagemann Snabe, delivered his keynote from Frankfurt, where it was broadcast live to Orlando. Hagemann Snabe detailed how SAP's software would help businesses produce the results mentioned in McDermott's address.  

Because of society's growing appetite for technology, Hagemann Snabe argued, businesses need to make faster, more-critical decisions. These decisions, he said, require new information technology architecture — an architecture that SAP has crafted to support its three-tiered software strategy across three delivery models:

• on-premises;
• on-demand; and
• on-device.

On-premises software, according to Hagemann Snabe, will help companies to "enhance best practices, and reduce total cost of ownership" by offering "real real-time analytics." 

On-demand software will fulfill SAP's desire to provide customers with the ability to make decisions anytime and anywhere. 

On-device software will make it possible to for users to operate from all mobile devices.

The three-pronged strategy, the executive told the crowd, is only possible thanks to SAP's long-awaited release of the on-demand offering Business ByDesign 2.5, which SAP is officially unveiling at the conference.

"The next version of ByDesign is here," Hagemann Snabe said. "It isn't fantasy. We have 100 customers and we plan to make it generally available in July."

Hagemann Snabe explained the delay by saying that SAP wanted to perfect the infrastructure of the software before it was released. He shared with attendees his confidence that the solution is ready.

News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine.

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