If you are known to tech, you would know that SaaS has managed to capture a significant market share in the industry. Be it the CRM or other software, the adaption to on-demand models has been complicated and slow. In addition, ERP and document management systems have been following similar footsteps.
This is where SAP comes in the game which has been named as the biggest name in ERP. Ever since the increase of SaaS adaption, they have been trying to adapt to the technology but they haven’t been able to comply with the prerequisites. After almost two years of work, SAP is finally rolling out its SaaS version known as Business ByDesign. This software is currently available in India, Germany, China, the United States, the United Kingdome, and France.
According to the research analysts, this SaaS product designed by SAP is a game-changer for the software company. There was a time when SAP was saturating and penetrating the huge markets but with their SaaS product, they are focusing on mid-market. According to the experts, the company is having difficulty in the development of efficiency in poor economic markets. This is why they have added low-cost features to SaaS.
The low cost will increase the number of people looking for this on-demand ERP. These ERP systems are designed to offer cost-efficient options for the players. With these systems, the customers will be able to roll out their ERP systems within weeks or months. However, in the older times, customers would need to wait for years and the investment of thousands of dollars was required.
If we look at NetSuite, their SaaS ERP has been in the market for long, possibly years but SAP is the new entrant. However, the solutions offered by SAP are an effective and highly-integrated system to ensure tasking of industrial content efficiently. This is portraying a positive image for SAP. However, there are some points that might be lesser beneficial for the SAP.
The margins will be less because the mid-market consumers are highly conscious about the money and costs. This is essential to note down because the target market is customers that need to roll out their configurations and systems. In other words, if SAP wants to ensure higher profit margins, they need to ensure higher volumes of sales.
In addition, SAP needs to consider multiple entities such as the cannibalization of the current customer base. There are multiple surveys conducted about the customer base. According to the results, only 25% of the customers actually use and implement the features of the existing system. However, the number of complaints regarding the ergonomics, functionality, flexibility, and usability have been spiking up all the same.
These are the features that are actually offered in the on-demand versions. This could be one of the reasons why SAP has shifted to the SaaS world because they do not want to disrupt the already unrested customer base. In other words, SAP is looking forward to starting from scratch in terms of customer base while starting with SaaS and ERP system.