SAP Brings Stone-Age Software Economics to Cloud Computing

The appetite for cloud computing applications among businesses today is dramatic, with leading analyst firms like IDC, forecasting cloud computing to grow six times faster than all software over the next few years.  With more and more companies turning their backs on stone-age on-premise software that’s expensive to buy and run, it’s no surprise that the old on-premise vendors, like SAP, that became addicted to peddling multi-million dollar ERP deployments are frantically trying to jump into the cloud computing game.

Unfortunately, there’s one small problem. By trying to make the same kind of money they made in the good old on-premise days with their new “cloud’ solutions, they’re carrying their on-premise ERP bloated TCO habits over to the world of the cloud. They want to inflict the heinous on-premise costs of last two decades on you, as you try and move your business forward into the next decade.  In fact, SAP proudly declares a woeful 5 year TCO of over $500,000 for just 10 users for its little deployed and much delayed SAP Business ByDesign product, on its online TCO calculator. Over $500,000? Really? We can only guess that no-one told them that businesses are choosing cloud ERP to completely transform their ERP cost structure, not perpetuate it.

NetSuite’s over 6,600 customers experience things a little differently - they have much higher expectations for cost transformation. In fact, side by side, NetSuite is 40%-70% more cost effective than SAP Business ByDesign for the same number of users, with NetSuite costing around $187,000 over the same 5 years.  That’s real money - over $300,000 in savings. And one more data point – according to NetSuite customers like COMMCO who evaluated SAP Business ByDesign, SAP’s solution has less than half the functionality of NetSuite. And COMMCO’s 5-year cost, including subscription, together with implementation and a migration from SAP R/3, is over 40% cheaper than SAP’s online estimate.

In a nutshell, SAP Business ByDesign costs way more money, for way less functionality. So it’s no surprise that “SAP struggles to find takers for its Business ByDesign SaaS offering”! If you want the TCO proof for yourself, go ahead and plug in the numbers for your company – whether you’re a software company, a wholesale distribution business, or a manufacturer, we guarantee you’ll be underwhelmed at the bloated costs of SAP Business ByDesign.

But to save you some time, we crunched the numbers and provided some side-by-side comparisons of how SAP Business ByDesign stacks up against NetSuite’s true cloud solution over a 5-year period.

Below are the comparables for three 10-user deployments, at a manufacturing company, a wholesale distribution company, and a high tech software company. In every case, NetSuite is more than 60% more cost effective than SAP Business ByDesign. The difference is so large, that you may confuse SAP Business ByDesign for one of its old world on-premise solutions! Imagine that!

In fact, when you compare real world NetSuite deployments with SAP’s hypothetical best case estimates the numbers become even starker. By benchmarking a number of other manufacturing and wholesale distribution customers who deployed NetSuite with an accelerated deployment to as few as 12 users, and comparing them to SAP’s own estimates, NetSuite demonstrates a 5-year cost saving of over 70 percent versus SAP Business ByDesign. That’s real transformation – and it’s not delivered by SAP Business ByDesign, it’s delivered by NetSuite.

The real ERP cloud is available right now – it offers way less cost, and way more functionality, and it’s being used by over 6,600 businesses across the globe. It’s NetSuite, not SAP Business ByDesign.

Paul Turner


comments powered by Disqus