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October 13, 2010

SAP defends its cloud strategy

German software giant admits it is playing catch-up, but it's not yet ready to say just how many SaaS customers it has

By Cbr Rolling Blog

German software giant SAP has defended its cloud strategy and insisted that it picked the right path for its SaaS offering, Business ByDesign, writes Steve Evans at SAP’s Berlin TechEd conference. But it won’t say how many SaaS customers it has won over so far.

The company has come under fire from its own UK & Ireland User Group, which revealed results of a survey taken earlier in the summer about its cloud strategy. The majority (73%) of those quizzed said that they felt the German software was too slow in bringing its Business ByDesign platform to the market.

Perhaps more worryingly for SAP was the revelation that 16% even said they ended up using another vendor’s technology in another area of their business because SAP did not have an appropriate SaaS offering for their needs.

Speaking to CBR, Sven Denecken SAP SVP LoB on-demand, said that the company does not regret delaying its SaaS platform, although he did admit that the firm is playing catch-up on many of its rivals.

"In hindsight you regret many things in life," he said. "But when a vendor like SAP gets in to something it’s important that the processes and infrastructure are correct and you need to take a large proportion of your customers with you. Yes, you could have started that earlier but no one was thinking five years ago that you would put significant data in the cloud. But the market has voted with its feet and the take-up of complete suites in the cloud like ByDesign has been tremendous."

"I don’t believe that everything will overnight move to the cloud," Denecken added. "But we believe that hybrid cloud offerings on on-premise and on-demand will stay here for a very long time. On-demand is here to stay and we’re seeing good proportions going there. We’ve embraced the cloud, and that helps us understand the different models. We firmly believe that, even if we’re in fast catch-up mode, that we can scale very fast."

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It’s difficult to assess how successful Business ByDesign has been so far. It was launched back in 2007 with SAP hoping for a 10,000-strong user base by the end of this year. Recent reports however have suggested that figure may be closer to 100.

SAP would not tell us how many customers have signed up for Business ByDesign, saying it does not publicly disclose customer numbers. However in an earlier roundtable the company said that 10,000 customers was still a target. It simply chose not to put a time scale on reaching that number.

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