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It’s no secret that the giants of packaged enterprise applications—SAP,
Oracle, etc.—got lapped by nimbler competitors in the race to take their
business software to the cloud. Salesforce.com and Netsuite went to
software-as-a-service right out of the gate, while SAP,
in particular, has struggled to develop a credible version of its software for
the new paradigm.

The situation looks to be changing, however, as 2010 could be the year that SAP
gets into the race on a large scale. After two years of fits, starts and
disappointments, Business ByDesign, the company’s full suite of enterprise
applications rearchitected for the cloud, is expected to finally make its way
to the general marketplace and into the hands of SAP’s
midmarket channel partners.

There’s a long history here. SAP
originally introduced Business ByDesign in limited distribution way back in
late 2007. It was not well-received. So based on the early customer reviews, SAP
pulled Business ByDesign back in-house to address integration and other architectural
issues and to incorporate more support for newer technologies such as
virtualization. The suite of services, which includes CRM,
supply chain, BI and analytics, has been a work in progress ever since.
Finally, late last year, the company put a pilot version of the SaaS suite,
which is sold by partners on a subscription basis, into the hands of a limited
number of channel partners.

Steve Neisman is one of those partners. His firm, Cincinnati-based
itelligence, is one of the largest SAP
reseller and consulting services firms in the world. It is piloting Business
ByDesign now and plans to be one of the introductory partners when SAP
goes to general availability with the SaaS offering later this year.

“This really is a completely different architecture and interface [than
legacy SAP suites], and it’s built to
address the need for a cloud offering,” Neisman told Channel Insider.

Neisman explained that while SAP’s other
midmarket application offerings, Business One and All-in-One (which separately
began being offered in a
subscription pricing
model this week), were based off the code from SAP’s
flagship R3 enterprise suite, Business ByDesign is a complete from scratch
animal.

“We really see this appealing to the typical midmarket customer, in addition
to large enterprises that want a Web-based solution for regional sales
offices,” he explained.

Neisman said SAP, historically a direct
company, over the years has evolved its channel strategy in the right
direction, hiring channel-savvy veteran executives such as Kevin Gilroy to
manage SAP’s North American channel. He said
SAP’s also gained better perspective on the
channel via the acquisition of Business Objects.

“They aren’t perfect yet, but there is more effective go-to-market, lead
generation and delivery mechanisms,” he said. “The cloud is a natural evolution
of where software is moving, and I think it’s going to be a growth engine for SAP
in 2010.”

SAP has not provided a
final release date for Business ByDesign, but Neisman says later this year.