Cannell.org/blog

Phil Wainewright makes some fascinating observations about the roll-out of SAP's Business ByDesign (BBD) SaaS offering as he arriving at this week's SAPPHIRE conference in Berlin. This interesting turn of events came up earlier this month at the SAPPHIRE conference in Orlando. Charlie Wood has more on it here and here.

Vendors planning to launch SaaS offerings of their traditional software products should take note. The internal struggle between teams competing to deliver SaaS and traditional software could get ugly. In SAP's case it appears (at least, initially) that the SaaS team is on the losing end since they are waiting until changes are released to the full product (and then installing and adapting them to the service) before announcing availability of BBD. It's not clear if this is just a startup condition or something that will persist.

On-premise vendors never have to run their own software*. This is by far the largest (and least often anticipated) handicap suffered by on-premise vendors when embarking on the on-demand model. [*OK, maybe some of them ‘eat their own dogfood’ by using it in-house. But they never really experience it as their customers experience it.] They are in blissful, utter ignorance of just how difficult it is to install and run their own products.

...At this rate, Business ByDesign is turning into a masterclass in how SaaS innovation can never thrive inside a conventional software company. Its developers started out grossly underestimating the scale of the task ahead of them. Now that they’ve started to understand what they’re up against, they’re being starved of development resources and marketing spend.

Is BBD hoist by SAP’s on-premise petard?