New SAP IaaS for Business One Cloud benefits small partners most

SAP announces a new infrastructure-as-a-service option for Business One Cloud which has been available in Canada since last Thursday, and in the U.S. for several weeks before that.

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Luis Murguia, SVP and GM, SAP Business One

NEW YORK CITY – On Tuesday SAP entered the infrastructure-as-a-service (IaaS) business around its SAP Business One Cloud solution. It provides SAP partners with more choices for deployment. Run in data centres operated by SAP, this new services offering will come with a range of complementary services like backup and restore, disaster recovery and platform maintenance. It is available now in North America, with expansion to Europe and Asia scheduled around mid-year 2016.

“Three years ago, we started a journey to make Business One a player in the cloud,” said Luis Murguia, senior vice president and general manager, SAP Business One. “Our strategy was very simple – give the Business One customer a great customer experience in a 100 per cent partner-centric model, with subscription licensing available. Then two years ago, we introduced our multi-tenanted SAP Business One Cloud Control Centre that let partners host it, and have up to 25 customers running on the same copy of Business One.”

Murguia said that this July, SAP expanded the offering again with the introduction of browser access, allowing Business One to be run on a browser.

“Still, what was missing was infrastructure,” Murguia said. “Partners typically used AWS to host. The problem is that the ones which were small businesses can’t get good pricing from AWS. So we decided to get into the infrastructure-as-a-service business, and will offer the hosting ourselves to partners, so they can offer a full cloud experience for less.”

The offering was actually made available in the U.S., several weeks ago. In Canada, it has been available only since last Thursday.

“We wanted to make sure it was compliant with Canadian data protection laws, which are stronger than in the U.S., before releasing it there, Murguia said.

“We are initially launching it in North America for the next six months,” Murguia added. “It is a controlled release, because we want to make sure we get it right.”

Partners will now have three deployment options for the subscription-based offering of SAP Business One Cloud. They can run it in a partner’s own private hosted cloud. They can continue to run it in a cloud infrastructure hosted by a third party like AWS. And now, they can run it in data centres run by SAP if they choose.

Murguia said this third option will have the biggest impact on their smaller partners, because it effectively reduces the entry barrier into hosted services.

“The smaller the business, the larger the benefit from this option, while the larger the business, the less the benefit,” he said. “The result is that the smaller partner benefits the most.”

Murguia said SAP thinks that SAP One’s 100 per channel strategy will become ubiquitous in the space, but that their first-mover advantage here will prove significant even as their competitors move to their model.

“We believe that the born in the cloud ERP vendors will go channel in what we call ‘Dell Syndrome,” he stated. “Now, they have a pure direct sales model, where the partners have a role in implementation – the same model that Dell used to have. In the SMB, in the long term, the personal touch that a partner brings has tremendous value – and Dell eventually recognized that. We believe companies like Salesforce will as well. But we have a history of working with channel partners in Business One, and are 100 per cent indirect. We don’t need to earn that lesson again.”

SAP also announced what they termed a major milestone – SAP Business One’s 50,000th customer, iMerchandise LLC, a North America-based vertically integrated e-commerce company that offers 110,000 sports, music, entertainment and lifestyle products across more than 25 online channels worldwide.

“We won them in a head to head competition against Netsuite,” Murguia said. “They have a very sophisticated ecommerce program, and needed our very advanced integration capabilities.”