Cloud ERP Software – SAP “Slows” Development of BusinessByDesign

Posted by Admin on October 23, 2013 under ERP Software | Be the First to Comment

Accounting Today reports that SAP has decided to slow development of the BusinessByDesign cloud software application in favor of building a cloud based platform for development on the Hana database. (My guess is that their vision would be to create a development environment similar to’s platform that has been used to develop many ISV software solutions) While they will continue to support current BusinessByDesign customers, they will not be focusing efforts to develop the software that reportedly cost $4.1B to develop and only has 785 customers. This is a continuation of SAP’s struggles to build a successful mid-market accounting/ERP software solution. While SAP is the most successful ERP software solution with large, global organizations, they have found the mid-market to be difficult. SAP now has tried to approach the mid-market with 2 products – Business One (traditional on-premises solution) and BusinessByDesign (cloud solution) – and has seen limited success.

While we can analyze the reasons for SAP’s success and failures, the more important discussion is the lesson we learn about cloud software solutions in general. Over the past 3 years we have seen a large number of cloud accounting software vendors appear in the market. Almost all of those software vendors have developed their solution with fewer resources backing their application development. So if a company as large as SAP can have difficulty developing and marketing their product, other vendors may eventually run into difficulty and may not have the resources to maintain the system for customers over the long term.

When you purchase a Cloud software solution, you are completely dependent on the vendor to maintain the software and hold your data. With all of these new Cloud ERP vendors, the market is a bit crazy right now. There has not been a lot of talk yet about what would happen if a large Cloud accounting vendor were to go out of business. This would be disastrous for any companies that were using that vendor. Make sure that you do your due diligence on these vendors and that you negotiate the contract to protect yourself from a worst case scenario in case your vendor goes out of business.

Cloud software solutions are a good solution for the right situation, and we have recommended them many times for our customers, but make sure that you do your due diligence and protect yourself for a worst-case scenario if you decide to put your trust in a Cloud software vendor.

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