SAP's Second Life

Xath Cruz2012-07-09

It seems odd, but SAP has brought back its cloud service called ByDesign, simply for the purpose of making SuccessFactors use it – even though the cloud service was originally put on the chopping block by SAP itself.

SuccessFactors is one of SAP’s recent acquisitions, with the price for acquiring estimated at around $3.4 billion. Unsurprisingly, SuccessFactors has started using a whole slew of SAP’s products, which includes the cloud service ByDesign.

As for ByDesign, it was originally launched in 2007 and was expected to have 10,000 users by 2010, but it fell way short of SAP’s expectations, only having 1000 customers even after being relaunched. Now, SAP Co-CEO Bill McDermott has turned around and announced that ByDesign will be an important part of the company’s cloud strategy.

One of the possible reasons why SAP is now reviving ByDesign is because SuccesFactors used to rely on SAP’s competitor, NetSuite, for their cloud needs. NetSuite is a natural rival for ByDesign because it offers its financial apps and ERP via the cloud.

Unfortunately for SAP, NetSuite has a really surprising announcement during a recent speech, as NetSuite CEO Zach Nelson stated that SuccessFactors is still secretly using their service, and has in fact renewed their contract, with SuccessFactors’ employees still regularly accessing their cloud.

We can’t fault NetSuite for basically giving SAP a virtual red face with its announcement, but it makes you wonder if SAP’s refusal to become a customer of its competitor is the only reason why ByDesign was revived.

It’s going to be an uphill battle, but SuccessFactors CEO Lars Dalgaard needs to teach their new bosses how to finally do cloud right. Of course, they are now in a position where they can be bullied by SAP into a lot of bad decisions, but let’s hope they stand firm.

Archived comments

Jon Reed2012-07-09
ByDesign is not a "cloud service" it's a SaaS suite. It was not "brought back" - it never went anywhere. However it was re-evaluated post-SuccesFactors. The reason it remains? Because it sells. And I got that directly from Lars Dalgaard who knows a thing or two about this because he runs SAP's cloud portfolio. This piece has so little valid information in it that I'd suggest you pull it and do some research.
Reality2012-07-09
Lars has never stretched the truth. And yes, sfsf still has not migrated over to bbd.
Uwe Mayer2012-07-09
I really don't know where you pulled this information from. SFSF reported their contribution to SAP's Q2 group result based on ByDesign.
Jon Reed2012-07-09
"Lars has never stretched the truth. And yes, sfsf still has not migrated over to bbd." Not sure why I would even respond to an anonymous comment, have the guts to name yourself and stand by your opinions. Of course unlike the author here I not only talked to Lars directly I double and triple verified the information on the continuation of ByDesign and the reasoning behind it from other sources inside of SAP. But if you'd rather go with an unresearched piece over my researched information that's fine by me. The whole issue of whether SuccessFactors runs ByDesign or NetSuite has nothing to do with the future of ByDesign. It's a PR sideshow which you seem to have fallen for hook line and sinker, though I will grant it was a well executed piece of marketing propaganda by NetSuite. I don't have an exact timeline update for you on NetSuite's active use inside of SuccessFactors as it doesn't really interest me but I can tell you this will be the last year NetSuite's contract is renewed by SFSF.
Michael Mankowski2012-07-10
I agree that SAP Business ByDesign never "went" anywhere. The product is viable and customers are not only purchasing the solution, but some are expanding their footprint. Lars is front and center for SAP's Cloud strategy and everyone feeds off of his energy and passion. The Cloud is where the action is, but also understand that customers are not "ripping and replacing" all on premise to move to the Cloud.