(Reuters) - SAP (SAPG.DE), the world’s biggest business software maker, began developing a Web-based offering five years ago but the project has been beset by delays.
It originally aimed to have 10,000 customers generating $1 billion of revenues from the software, called Business ByDesign, by 2010, but currently has just 80 customers using the product in China, France, Germany, India, the United States and Britain.
Following is a chronology of SAP’s steps to bring Business ByDesign to market:
Feb 2, 2006 - SAP says it will expand its customer relationship management software to include an on-demand option, to be delivered via the Internet and paid for by subscription.
Jan 24, 2007 - SAP announces it will invest 300 million to 400 million euros ($409 million to $546 million) over eight quarters in its “game-changing product” codenamed “A1S,” saying it represents a $1 billion opportunity for SAP. It says it aims for about 10,000 customers per year from 2010 onwards, and says the business is expected to exceed the margin of SAP’s established business from 2010.
Apr 20, 2007 - SAP says the additional investments in A1S will reduce its 2007 operating margin to 26-27 percent, compared with the 2006 operating margin of 27.3 percent.
Sept 19, 2007 - SAP unveils the software, now named “Business ByDesign,” to investors and journalists in New York, and offers personalized trials for invited customers. Prices will start at $149 per user per month, it says.
Apr 30, 2008 - SAP says it is modifying its rollout strategy for Business ByDesign and will now focus on six countries in 2008, with additional countries planned for 2009. It says it will take 12 to 18 months longer than planned to reach $1 billion in revenues and 10,000 customers for the product. It will engage with “significantly less than 1,000” customers in 2008. It also says it will cut the extra investment in the project by about 100 million euros in 2008, boosting its margin, and will make no extra investments in Business ByDesign in 2009, instead funding it out of its normal operational business.
“SAP maintains its full confidence in the product, the market opportunity and the associated business model of SAP Business ByDesign, as the company continues to move toward volume readiness in 2008,” it says.
May 5, 2008 - SAP says it has 150 “customer engagements” for Business ByDesign.
March 27, 2009 - SAP co-chief executives Henning Kagermann and Leo Apotheker write in the company’s annual report: “SAP Business ByDesign will open up a whole new midmarket segment for us, but first we are concentrating on making the new business model more profitable.”
Compiled by Georgina Prodhan; Editing by Hans Peters