SAP (Finally) Releases Business ByDesign 2.5

Larry Barrett

Updated · Aug 02, 2010

SAP kept its word to investors and customers this week by releasing Business ByDesign 2.5, the oft-delayed on-demand enterprise resource planning (ERP) and customer relationship management (CRM) suite update that could very well make or break the company’s reputation in the burgeoning SaaS market.

Three years after SAP (NYSE: SAP) first unveiled Business ByDesign, this latest version is now available in the U.S., the U.K., China, France, Germany and India. During its second-quarter earnings call last week, SAP officials promised customers and investors that it would release the update within a matter of days.

Often criticized by analysts and customers — who watched competitors such as Salesforce (NYSE: CRM), Oracle (NASDAQ: ORCL) and Microsoft (NASDAQ: MSFT) all roll out SaaS packages faster, with greater features and more competitive prices relative to their on-premises application suites — SAP is trying to make amends by launching a trio of starter packages with this release and aiming to entice customers of all sizes to jump aboard the SaaS bandwagon.

SAP officials said Business ByDesign 2.5 will be long on in-memory analytics, mobile devices support and enhanced lifecycle management apps to support large-scale, high-volume transaction loads for enterprise customers. For SMBs, the suite offers lower upfront costs than traditional software.

“With the general availability of feature pack 2.5, we have achieved a major milestone,” said Peter Lorenz, executive vice president of SAP’s and small and midsized enterprises group, said in a statement. “The on-demand services for SAP Business ByDesign are operated on the most modern cloud infrastructure and allow for true volume business.”

All three of the new starter packages are available for as few as 10 users.

The CRM starter package includes sales force automation features to help generate leads and manage the entire sales development and fulfillment lifecycle. SAP said it can be implemented in about three weeks at a cost of $13,500 and a subscription rate of $89 per user.

Business ByDesign 2.5’s ERP starter package, which includes integrated financials, accounting and business analytics, costs $37,500 to install and $149 per users. It can be up and running in roughly six weeks.

Finally, the professional service provider starter package has a one-time implementation fee of $45,000, a $149 subscription rate per user, and includes what SAP describes as “world class” business process management applications typically reserved for the largest of enterprise customers.

Ramping up its SaaS efforts hasn’t been the only area in which SAP has been busy. After years of ridiculing archenemy Oracle for its frenetic merger and acquisition strategy, SAP has made a series of multibillion-dollar purchases of its own in recent years, most recently shelling out $5.8 billion for database software developer Sybase in May.

Last week, SAP also showed that its core software business remains strong, despite disappointing most analysts when it returned a second-quarter profit of 491 million euros ($638 million) on sales of 2.89 billion euros ($3.5). Wall Street expected SAP to earn about 525 million euros in the quarter. Company officials blamed the shortfall on unfavorable currency exchange rates and accentuated the fact that total software sales for the quarter improved a respectable 16 percent from the year-ago quarter.

Read more about SAP ERP here.

Larry Barrett is a senior editor at, the news service of, the network for technology professionals.

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