SAP takes another shot at CRM on-demand

SAP is releasing a new CRM application and says this one will focus on sales users, not management and can succeed where its predecessor failed in replacing Salesforce.com in its install base.

SAP previewed its forthcoming Sales OnDemand application at the CeBit 2011 conference in Hanover, Germany, yesterday, and executives said it will prevail where its predecessor did not because it focuses on how people work together.

SAP first released a Software as a Service (SaaS)-based CRM product five years ago, in what was largely a reaction to its customer base turning to Salesforce.com and its easier implementation instead of SAP’s own CRM product. Yet that previous version, SAP Sales On-Demand, never really took off. This version of Sales OnDemand will be different, promised John Wookey, executive vice president Line of Business On Demand with SAP.

“CRM OnDemand was based on taking the on-premise CRM application and creating a hosted version of it and making some minor changes to it,” Wookey said. “The product wasn’t that bad and, some customers were pretty successful, but it wasn’t going to let us compete effectively in the market.”

The new version will be competitive, according to Wookey. He said SAP went to “sales force automation 101,” discussing the product with partners and customers with representatives from a multitude of CRM roles.

“The typical business application is oriented around the defined business process of the company -- in sales that’s list, lead, opportunity, close and managing the objects around that,” he said. “For where it goes and what problem it tries to solve, it’s fine, but when you think about what happens in a sales process or a business process, it’s not complete.”

The latest CRM SaaS product will be made available to select customers at the end of this month.

With it, Wookey said SAP took a different tack.

“We said, ‘Lets’ do something more,’” he said. “The way people work together, create a sales team and connect is as important as supporting the underlying business process. [The new release] looks a lot more like a social networking application than a typical transactional business process. A lot of what we do is facilitating how people work together.”

SAP’s new-look Sales OnDemand application is a big step forward from its first, according to Ray Wang, founder of San Mateo, Calif.-based analyst firm Constellation Research Inc.

“It's a really different product,” Wang said. “The design is very compelling. You’re looking at activity streams, Xcelsius-like reports in the back ground. It’s really designed for the sale user not management.”

Sales OnDemand is based on the Business ByDesign platform, SAP’s SaaS-based ERP that has been through its own fits and starts due to reports of performance problems, bugs and SAP’s difficulties in making the SaaS model profitable.

Sales OnDemand uses Business ByDesign’s underlying architecture and was built using agile development processes, according to Wookey. That means it’s a multi-tenant hosted product and physically resides in the Business ByDesign data center.

Pricing for Sales OnDemand was not released, but will likely be announced at Sapphire, SAP’s annual user conference, Wookey said. Microsoft recently entered the market with its own SaaS-based CRM product and made its $34 per user per month price a competitive feature. Wookey acknowledged that SaaS CRM pricing does matter, but it’s far from the only factor.

“My general view is pricing is less important than the ability to get value out of it,” he said. “Where I think we’re going to show some pretty compelling value is in this empowering your workforce around a business objective. We will have to be competitive from a pricing standpoint but we will differentiate with support for how people work together.”

SAP Sales OnDemand will also be offered on a per user per month basis and it will initially be targeted at SAP’s considerable base of customers with its ERP system already installed. Wookey is confident it can succeed in replacing Salesforce.com in many of those environments where its predecessor could not.

“I think that’s a real opportunity,” he said. “[Customers] could even continue to use Salesforce for certain tasks but use this for a team-based selling approach. Even where Salesforce is installed in our install base, it’s not installed globally.”

Barney Beal is the News Director for the Business Applications and Architecture Group at TechTarget. You can follow him on Twitter at @barneybeal

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