Analysts have come out in support ofSAP's decision to limit the roll outof itssoftware-as-a-service (SaaS)
offering,Business ByDesign, after it failed to
meet early expectations.
The software company admitted Business ByDesign was struggling
to make profit margin targets last week when it announced sales
figures for the last quarter.
SAP now plans to concentrate on customers in the US, Europe, the
Middle East and Africa in 2008, which means it will take 12 to 18
months longer than planned to meet its goal of 10,000 customers by
2010.
SAP also said it would make no further accelerated investments
in Business ByDesign after this year, but would fund the product
out of its normal operations.
Warren Wilson, research director at consultancy firm Ovum, said,
"Business ByDesign is a long-term, strategic bet, and SAP can
afford to take some time to get it right."
He said this was especially true given the market's early stage
of development, the absence of a strong head-to-head competitor,
and the strength of SAP's core business.
China Martens, an analyst at 451 Group, said, "It is better to
pull back at this early stage rather than encounter these
significant teething issues when the suite is globally
available."
Wilson said although Business ByDesign's early results were
disappointing, they were not surprising given the scale of the
undertaking in both technical and business-model terms. "The slow
launch is not good news, but it is way too soon to worry," he
said.
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