Much Ado About SAP’s Business By Design

SAP finally unveiled (and named) its much-awaited on-demand software solution. I don’t know what the fuss is about.

Herr Kagermann says that “a new era” has begun. Actually, the new era began at about the turn of the century when several innovative software suppliers recognized the importance of the Internet and the problems with on-premise software. We released Plexus Online, a secure, multi-tenant centrally hosted application suite, in 2000 and have been growing rapidly ever since. Procuri, RealPage, and of course NetSuite and Salesforce.com are some others that have proven the model in their markets.

What’s new here is SAP’s recognition that large companies don’t innovate as well as smaller ones, that the giant fell behind. Goliath also realized that his previous attempts to address the mid-market have gained no traction. Indeed, my fellow on-demand veterans predict that SAP will fail once again to provide a compelling, comprehensive, affordable solution to the mid-market.

I am thrilled to have SAP enter the on-demand ERP market. If executives at mid-size companies had any lingering doubt about the viability of ERP on-demand, SAP’s scurry into the market should put that to rest. The behemoth is slowly awaking to see that the train has not only already left the station, but it is around the bend and has already picked up a lot of passengers.

I am eager to see SAP climb the same learning curve that Plexus and others have already done. There is much more to this on-demand business than meets the eye. I’ll elaborate on that later.

Mark Symonds, CEO of Plexus Systems, Inc., is an operations expert with 25 years of experience. His blog is about the convergence of ERP and the on-demand (software as a service) delivery model, and its impact on manufacturers.