Questions over SAP's two-product targeting

By ADAM GIFFORD

Gartner research director Kristian Steenstrup is questioning business software giant SAP's decision to target the mid-market with two separate products.

SAP is offering industry-specific, stripped down templates of its core R/3 software as mySAP All-in-One, with implementations promised from as low as $250,000.

It has also rebadged a separate product as SAP Business One, which it says is suitable for companies from 10 to 250 staff.

Ads run to coincide with its Australia and New Zealand launch this month said licences and installation for a five-user site could cost as little as $25,000 - setting it up for the low-end market now covered by the likes of Microsoft's Great Plains and New Zealand-made exo-net.

It will be sold through smaller implementers and SAP is trying to attract Great Plains vendors to add it to their offerings.

Steenstrup said Business One had potential here. "In the Australian and some Asian markets, the brand and support from a big company is more highly valued than the product.

"All-in-One is a different scenario - I think SAP are doing themselves and the market a disservice."

He said SAP could give the impression Business One had features found in All-in-One, or that there was some seamless progression across the products.

"They are actually talking about two completely and radically different products."

Steenstrup said that while templated software may suit some businesses, most organisations needed some customisation to fit their needs.

"I think what will happen is All-in-One will be introduced to the customer, but if the customer tries to stick their own processes in they will be upsold to the mySAP Business Suite."

SAP New Zealand head Ian Black denied SAP was planning such "bait and switch" tactics.

"The key thing in All-in-One is we have built in industry best practice and are supplying the tools and templates to achieve that."

Similar considerations would go into Business One sales.

"We will require resellers to develop very deep industry knowledge. It's not one-size-fits-all."

So far SAP has two New Zealand All-in-One customers - Lighting Direct and the Department of Conservation.

Lighting Direct managing director Dean Fulford refused to say whether the system came in under $1 million, but said it would be paid off in two years through increased efficiency and better stock control.

Lighting Direct has 140 employees in 22 stores from Whangarei to Invercargill. Fulford said the best practice argument was one of the reasons Lighting Direct chose SAP.

Lighting Direct is now live on SAP Financials, but is still working on the resource planning modules.

The Department of Conservation is working with Intelligroup to replace Oracle with a $1.5 million SAP All-in-One system.

Business management general manager Grant Baker said while it was template driven, the department could build in its individual requirements at the configuration stage.