Business by Design for SAP is something very unusual.
Firstly, in some ways it's a first with a "traditional" software house rolling out a "cloud" solution. All the existing SaaS providers are that and nothing else, so all credit to SAP for venturing into this space.
Secondly, Business by Design presents an interesting option for existing SAP users, as it offers the opportunity to buy into areas that frankly would never fly locally in small-scale implementations, purely because of hardware and staff resourcing. The beauty here is that it offers great integration from SAP ERP to SAP Business by Design.
You should not underestimate the amount of experience that SAP has gained in the enterprise world. It knows that in fully using an enterprise solution every part of your business is impacted and this is where the dilemma starts to surface.
Everyone always quotes salesforce.com as the one to watch in the cloud space, and yes it's no doubt good at the sales and marketing side of the enterprise, however that is just part of one of the core business processes - order to cash; and actually it's mainly about the order.
In some businesses, especially service-related businesses the order component is absolutely the most critical and in some cases the major part of the business activity.
But let's think about a manufacturing company where getting the order is the only the first part. Then they have to procure the parts and services, assemble it, package it, deliver it and get the money for it.
We shouldn't forget they have to do that safely, on time and to budget, while at the same time looking after their staff and maintaining their premises. For a public sector operation, such as police force who have customers (albeit another sort!), they have police cars, buildings, and people to look after as well.
Now using properly integrated solutions demands 100% or as near as possible availability.
This is where you start to see the bigger picture - I know I will upset some people here but if the "sales force" in a few organisations went offline for a couple of hours then it wouldn't be the end of the world (this of course has happened with salesforce.com).
However, if the manufacturing plans and recording of that manufacturing and the martialling of the components wasn't there for a couple of hours, or if I wasn't able to find the spare part in the engineering stores for my oil rig that had a problem for 2 hours - ouch!
Then imagine that happening to 33% (SAP's share of the ERP market) of the world's organisations at the same time. Do you get the picture?
Now that's only the operational side. Let's talk data. In a big multinational that is using the full complement of business processes available in an SAP solution we are talking about terabytes or even petabytes (how big is that? - Facebook has 10 billion photos now which is around 1 petabyte) of information.
Add several of these together and we're getting seriously big data centres of which just one isn't sufficient for business continuity...and so it goes on.
So where's that taking us? Well it's a representation of the size of the task that SAP has undertaken and lets be clear there are businesses now running Business by Design - it isn't vapourware. But here's the business conundrum: today you can already buy your data centre and hardware and your support services from someone else remotely situated to your organisation.
That's a mature market and frankly now a commodity. So the only difference becomes the software. What's the difference between the "cloud" software and traditional ERP software, and what it can do for you? The price differential is generated by the functional capabilities - complete end-to-end business process is SAP's strong point and this is what gives it a higher margin over the "cloud" players.
How that is sold to customers? Now that is SAP's challenge.