It’s been a while now since the fireworks of SAPPHIRE Now (my takes on day 1, day 2 and day 3). I thought it would be apt to have a little catch-up on what has said been about SaaS ERP in general and SAP’s Business ByDesign (BYD) in particular since then. I also want to add a few points re the SDK and beyond.

SAP has also produced a cute little video explaining BYD in a nutshell, which is worthwhile sharing.

Despite the simplicity that is presented here, ERP pundits have always been in agreement over the fact that anything SaaS based represents a new ball game for the old-skool “Big ERP” players such as SAP and their partners. In my view, the last few weeks have put a little bit more flesh on the argumentative bone.

Dennis Howlett provides some great insights and thoughts in his worthwhile read on “So you want to be a saas Consultant ?”. Dennis points the spotlight on the consulting and implementation partners for solutions such as Netsuite and ByDesign. Where is the possibility for them to make money? With regards to saas deals for small and medium sized clients he writes:

The upside is that in a deal of this kind, there is every incentive to ensure client success because you’re into a recurring revenue stream for as along as the client remains onboard.

This view is very much reflected in an excellent interview Jon Reed did with Skyytek’s Ray Tetlow (listen from 2:20 onwards). Skyytek has been working in the saas field as implementation partner for a number of years now and has 1000+ completed projects under its belt. Skyytek has also been chosen as BYD partner.

Furthermore, Tetlow points out that in his view classical ERP implementation firms will struggle to enter the saas market due to shorter implementation lifecycles, which renders long presales activities obsolete. It’s what Joshua Greenbaum calls a “tectonic shift in the marketplace”. Moreover, Greenbaum points out:

How SAP’s partners will make the healthy margins they need to be in the game with SAP has been, in retrospect, a bigger problem than the technology issues that stymied ByD’s initial release. And, by the way, thinking that value-added partners – the smart, savvy ones SAP wants to have on board selling ByD – will be happy with a volume business won’t cut it. Smart and savvy won’t be interested in volume, IMO.

Going back to Jon’s interview with Ray Tetlow this makes sense, as it appears that low office footprint, virtual consulting and less face time is what Skyytek’s model is shifting towards. Whether this will also be valid for larger saas projects and bigger end clients remains to be seen. Dennis points towards the importance of skills when implementations are done on a larger user scale:

Here’s the kicker – larger saas implementations require a lot more than understanding a general ledger. You really need industry expertise in order to help clients move towards implementing best practices and processes. I’ve argued many times that practitioners have these skills – they just don’t necessarily know it. Now is the time to think this through and think about how and where you’ll start assembling teams. The likelihood is you’ll need to look outside your own walls.

Greenbaum diverts the saas-interested audience to another topic which especially in SAP BYD Land is going to hot up even further over the coming months: BYD enhancements and tooling.

The good news for SAP is that ByD will have an xRM-like development environment by year’s end, one that can theoretically tap into a richer palate of processes via ByD than xRM can via Dynamics CRM.

Expect long queues when SAP’s BYD SDK “ByDesign Studio” (now renamed from “Copernicus)” will be available for 4 hour hands-on sessions at this year’s TechEd. What we know so far is that ByDesign Studio will be based on Microsoft’s Visual Studio, C# and potentially SQL Server. Despite some noises from the developer community I think this was a good choice, as SAP is able to tap into a pool of millions of developers who can innovate and extend BYD to their heart’s content in a “partner layer”. It can be expected that these ByDesign Studio based add-ons will use web services to access the ABAP-OO based BYD cloud system and leverage BYD’s Silverlight UI.

Skyytek’s Ray Tetlow believes that only larger custom developments like for example a call center extension are best use cases for partner solutions. Smaller extensions like custom fields or table enhancements can be customised by implementation teams and with little effort.

But where are solution partners going to market their extensions and add-ons in order to tap into the long tail? A go to market strategy for this still remains to be seen and answers will hopefully be provided during this year’s TechEd. Excitement for ByDesign Studio could be significantly hampered if SAP misses out to provide clarity on this when presenting ByDesign Studio. This is especially important with regards to pricing, if SAP is planning to take a cut in a “BYD App Store”.

Moreover, it will be important for SAP to mobilise beyond the existing developer and BPX community it has today, of which a large part has little or no C# skills. You might think that SAP ERP core skills are not that relevant anymore in this new field and you would probably be right. However, if ByDesign Studio really leverages web services then everyone who has used SAP web services before is in an advantageous position.

In the long run, it can be expected that these skills will become commoditised, but for the next 3-5 years SAP is going to have to engage not only with their existing community, but also reach out even further to those Microsoft developers it will eventually need. Given the uphill climb it already has on the partner involvement side, it is not going to get any easier.