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SAP CRM Review

Company Information:
  • This SAP software review is being replaced by the independent SAP Business ByDesign CRM review at
  • SAP is the world's biggest applications software company. The company's ERP (enterprise resource planning) software is used to integrate back office functions such as accounting, distribution, human resources/payroll and manufacturing. SAP retains more than 35,000 company customers in 120 countries. The company is using its back-office ERP weight to gain traction in the CRM (Customer Relationship Management) market.
SAP CRM Product Information:
  • After ridiculing and resisting the software as a service (SaaS) market for years, SAP became the most recent player to join the SaaS industry with its current first version On-Demand series product line.
  • The SAP on-demand target market is first and foremost existing SAP (ERP) customers. Beyond the company's install base the company pursues other medium-sized and enterprise organizations.
  • While SAP targets several vertical markets with its namesake ERP software, there are no On-Demand industry solutions.
  • SAP's on-demand CRM software uses the same code as its MySAP CRM suite. This permits the two solutions to more easily work together in a hybrid fashion.
  • SAP's development platform its based around its proprietary NetWeaver language. While acceptable to some, many IT (information technology) professionals are adamantly opposed to learning yet another proprietary tool and language and instead prefer CRM applications developed with industry standard tools such as Java (J2EE) and Microsoft .NET.
  • CRM On-Demand pricing is $75 per user for SFA, marketing or service - or $125 per user for all 3 modules. There is a minimum 100 users.
  • The Business ByDesign ERP SaaS suite is $149 per user per month with a minimum of 25 users.
  • SAP has chosen not to manage data center software delivery and instead relies on IBM hosting for software delivery.
  • Customers may also have to purchase additional disk storage space from IBM hosting services in 25 GB increments.
CRM Software Products and Modules:
  • SAP Sales On-Demand (released February 2006) supports account and contact management, calendar and task management, opportunity management, quotes, sales management and basic sales reporting (i.e. pipelines and forecasts); integration to Lotus Notes and Microsoft Office applications are also available.
  • SAP Marketing On-Demand (released May 2006) includes campaign management, lead management, customer segmentation and owner realignment.
  • SAP Service On-Demand (released September 2006) delivers basic help desk and customer support, trouble ticket management, rules-based distribution, simple escalation and routing of service tickets, service level monitoring and some basic service analytics.
  • Back-office integration. SAP has an advantage for current SAP ERP customers due to its packaged integration to its on-premise back-office ERP application. However, we at online-CRM have not yet performed or witnessed this integration and we're a bit cautious based on some user feedback comments and articles such s the one published by Robert Westervelt, News Editor of SearchSAP titled "The hidden costs of SAP on-demand".
  • Isolated tenancy. When SAP introduced its On-Demand CRM software in 2006, it touted its isolated tenancy model as a high availability (HA) mechanism to provide clients greater system flexibility and reduced widespread system failures such as those incurred by Notwithstanding the dig on, many CRM analysts have sided with the isolated tenancy model as a superior delivery model when compared to the multi-tenancy (shared) model used by, Oracle On Demand, NetSuite and others. With isolated tenancy, each client operates in IBM data center with its own DB2 database and own IBM iSeries server.
  • Vendor strength. While SAP is undisputed an an ERP global giant, its CRM claims and reputation are much more questionable. Nonetheless, the company is an applications powerhouse and has earned an overall positive and professional reputation.
  • First version. SAP's On-Demand Customer Relationship Management software product line is in its first version. The product is very basic, somewhat difficult to use and lacks the deeper feature sets found in more mature competitive CRM hosted solutions.
  • Questionable intent. It's unclear whether SAP's entry to SaaS is a defensive move and largely intended to be a segway to on-premise upgrades. SAP's SaaS strategy is regarded by many analysts and industry insiders as little more than a vehicle to acquire hosting customers and then push the value proposition around their on-premise solution.
  • Missing functionality. The On-Demand product line fails to provide an offline edition, wireless edition and many other useful tools provided by other SaaS CRM competitors. Other basic weaknesses cited in a Network Computing review include the following:
    • Poor page to page performance - constant reload for every page.
    • Poor use and requirement for ActiveX to be used for synchronization and other purposes.
    • No import or export capabilities.
    • Only supports IE browser (due to use of ActiveX controls).
    • Built on SAP's NetWeaver platform (not an industry standard platform).
    • Security profiles can only be applied to users and not roles.
    • Not intuitive - "To create an account, you must first create a contact to assign to the account, but you can't simply navigate to the "New Contact" page without explicitly saving or canceling the account you're working on. You can't create a contact without an account either, and there's no way to create an account from the New Contact page. That's contrary to the process most salespeople follow, which is to start with a business card from his or her contact list."
Key Customers:
  • British Gas Business (UK)
  • Capita Insurance Services
SAP Competitors:
  • Oracle on Demand. While the major battle between Oracle and SAP is waged in the ERP industry, the two also battle it out in the hosted SaaS industry.
  • Aplicor. Aplicor firmly targets midmarket and enterprise organizations. While this is also the SAP target market, Aplicor's product is light years ahead of SAPs, however, the company does not have significant traction in this target market.
  • Marc Benioff, CEO of, is taking the fight to SAP. In an e-mail allegedly to staff but most certainly intended to be forwarded to the media, Benioff shows his aggression toward SAP by stating, "While SAP claims leadership in CRM, experience suggests a different story... if SAP's CRM software is any good, then why don't they use it to manage their own customer relationships? ... I have interviewed hundreds of salespeople and executives from SAP from around the world, and each has told me the only CRM system at SAP is an executive system based on Microsoft Excel." Benioff also listed some of SAP's bigger customers—DuPont, DeutschePost, AirProducts, Autodesk, EFI, DeutscheBank, Analog Devices—as CRM users.
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SAP CRM Review

Corporate Strategy
Although late to the SaaS party, SAP's on-demand announcement in February 2006 of a sales force automation module has been followed up with subsequent releases of marketing and customer support. SAP aims to appeal to the company's massive installed base of upper-midmarket and enterprise ERP customers. SAP's uniqueness lies in its hybrid distribution model and its isolated tenancy hosted delivery. The hybrid architecture for the on-demand offering combines the benefits of a hosted model with the reliability of an on premise deployment. The isolated tenancy hosting delivery model will use a single instance of the application which is run on the customers own database in order to provide customers with greater flexibility due to increased system autonomy as well as alleviate any cross customer downtime due to a single database failure. SAP is hoping its isolated tenancy strategy will separate it from the pack and protect its customers from widespread system outages incurred repeatedly by

Company Message
SAP's SaaS strategy is single-tenancy, enterprise wide systems. Bill Wohl, SAP Spokesman reiterates the strategy quite clearly, "There has been a move away from best-of-breed CRM software vendors towards companies like SAP that offer companies suites integrating CRM with other enterprise applications." While we agree that market niche products and point solutions will eventually give way to enterprise-wide application suites, we think customer demand will favor complete SaaS solutions as opposed to SaaS CRM products integrated with on-premise ERP systems.

Enterprise-Wide SaaS
SAP’s software as a service (SaaS) business strategy and flagship product, Business ByDesign (previously code named A1S), was officially introduced on Wednesday, September 19, 2007 as a one-size-fits-all, subscription-based package aimed at midmarket companies. SAP’s CEO Henning Kagermann said that the midmarket includes companies with a staff of approximately 100 to 500 that do not have, nor want, a sophisticated IT department to run their business software.

SAP designed Business ByDesign as a wholly distinct product, separate from Business One and other SAP midmarket on-premise products. SAP claims it will invest up to 400 million euros ($559 million) in marketing and ramping up Business ByDesign by the end of 2008. Approximately one-fifth of the company's 12,300 software programmers are also working on Business ByDesign. The enterprise-wide SaaS suite is an inclusive ERP software suite which delivers integrated accounting, distribution, manufacturing, human resources and customer relationship management. The on-demand suite cost $149 per user per month with a minimum of 25 users. Customers that require more limited access, such as for self-service inquiry, will be priced at $54 per month for a group of five users.

The new SaaS solution is a big component in achieving SAPs strategy to more than double its customer base to 100,000 by 2010. CEO Kagermann told Reuters that 2008 would be the year SAP would prove the technical viability and business case for Business ByDesign, which it hopes will eventually become more profitable than the rest of SAPs business. From 2010, SAP intends to win 10,000 new customers per year and $1 billion per year in new revenues from the new SaaS software. For now, SAP is slowly advancing Business ByDesign to select early adopters in the United States and Germany, followed by Britain, France and China. The company expects to have limited distribution until late 2008.

Company & Product Evolution
Our take is that this On-Demand offering will allow SAP to expose itself to incremental opportunity, but in the long term, the company will use its hosted offering as a pipeline to future on premise CRM and ERP business. Many in the industry continue to believe that SAP's SaaS actions appear defensive in nature and remember the prior claims and statements that SAP's research suggests that customers consider the data contained in enterprise resource planning software too important to be procured in an SaaS delivery model. "Customers have been telling us that delivery options in certain areas makes sense for isolated business process where small sales units want a rapid start and can get going quickly," SAP's Wohl said. "Complex business process that run across the business are considered strategic and critical and customers say they just don't want to lose control." Similarly, former SAP technology leader Shai Agassi said that companies would not be willing to pit core business processes on the Internet and that software as a service would not effect core operating processes. Our thoughtful response to these well prepared statements is BUNK! To say that ERP data is more critical than CRM data is ridiculous. For most organizations, there two most valuable information assets are their customer list and their sales information - data contained in CRM applications. To imply that sales processes are less 'complex" and strategic than entering accounting transactions into an ERP system is completely without merit. We suggest that Mr. Wohl cease trying to protect his on-premise turf and truly harvest the opportunity to apply SAP's back office ERP domain knowledge toward an on-demand ERP application which compliments in on-demand CRM solution. SAP has the financial and talent resources to play catch-up and compete against already established players in the SaaS market if they choose.

Will SAP become a significant ERP SaaS provider? We're not really sure. We're keeping our hopes alive and reserving judgment to see if and how this powerhouse chooses to shake up the hosted CRM and possibly ERP market.

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