Over 35,000 customers around the world already use SAP Business One to manage their business processes, from financials to sales, on a single platform. It’s one of the most-searched SAP solutions on Google. This year, the company launched a cloud-based deployment option for the solution that is fully operated by partners: SAP Business One OnDemand.
Why move into the cloud?
“By bringing Business One into the cloud, SAP is addressing the segment of small companies that are very open to on-demand software,” says Michael Fiedler, global go-to-market lead for SAP Business One OnDemand. In general, SMEs are more open to cloud-based solutions than large enterprises. This is because cloud solutions require very little long-term IT investment – in terms of servers, maintenance, and staff – and don’t have any up-front costs.
Companies can license the solution on a per-user, per-month subscription basis through one of SAP’s value-added resellers, or VARs. In turn, the VARs work with SAP-certified cloud providers to deliver the solution. Over 30 customers have already subscribed to the offering since it became available in mid-2012. “We’ve seen significant uptake in Latin and Central America and in the APJ region,” says Fiedler. Companies in developed markets – traditionally a bit slower to adopt cloud-based solutions – have also shown interest in the on-demand deployment option. One U.S.-based VAR, Orchestra, recently closed five deals within just a few weeks. According to Fiedler, their success is due in large part to the targeted approach they developed with their certified cloud provider to offer packaged solutions for breweries.
The hidden challenge
Other partners should take note of this. If they don’t adjust some of their current Business One practices to the on-demand business, says Fiedler, they could face some challenges: “What partners have to realize, especially those who are used to the on-premise business, is that there’s another player in the game – the cloud provider. Partners simply need to embrace the new on-demand model,” Fiedler says.
The next step for Business One OnDemand involves bringing all existing solution add-ons from partners into the cloud. Currently there are hundreds of such solutions available that provide pre-integrated, industry-specific functionality and line of business features. In the past, they were intended for use with on-premise solutions, but SAP is now qualifying these add-ons for the cloud.
An upgrade planned for the end of November will introduce significant functional additions in lifecycle management for add-ons. This is an important step in lowering the total cost of ownership, one of the key benefits of cloud-based deployments. Moreover, SAP plans to offer an add-on certification program for Business One OnDemand in 2013. It will be similar to what already exists for Business One on-premise.
Not just for SMEs
Strange as it may sound, one of the most interesting deployment scenarios for this solution doesn’t involve SMEs at all. Like the on-premise version, Business One OnDemand can also be used by subsidiaries of large enterprises. In this scenario, companies will be able to use the Business One OnDemand cloud architecture to deploy the solution in their own private cloud – an attractive option for large enterprises.
Most SMEs are looking to save costs and tend to go with a public cloud environment. Large enterprises, on the other hand, are more concerned about control, process standardization, and reliability; they usually choose to set up a private cloud in their own data centers. Business One fulfills these large enterprise requirements at the small enterprise level, and that’s what sets it apart. “We are seeing interest from telcos, banks, and business networks that are looking to set up private clouds with their subsidiaries, or partners, or even customers,” says Fiedler.
In fact, large enterprises can run Business One in the cloud at some subsidiaries and on-premise at others, Fiedler points out. And they will still have all their data integrated across one backend ERP system. “This is an attractive option for global enterprises that have subsidiaries in countries without reliable Internet connections,” he explains.