SAP Anywhere formally launched in the U.S. this week. But while demand for the small business-focused CRM solution is strong, a change in SAP’s SMB applications strategy has led to the Canadian launch being put on hold for now.
ORLANDO – For smaller businesses looking for a state of the art CRM solution in the United States, and for SAP channel partners interested in selling such a solution, this was definitely a red-letter week. On Monday, SAP announced that its new SAP Anywhere solution, which had been in pilot in the U.S. following successful launches in China and the U.K., was now generally available in the U.S. However, for Canada, the news is very different. While late last year, the plans were to make it available in Canada at some point in 2016, the strategy changed following the restructuring of SAP Anywhere and the other SAP SMB-focused business units earlier this year.
Channel interest in SAP Anywhere is clearly enormous. A year ago, ChannelBuzz reported on the original announcement of the plan to bring the product to market. Even though the story header clearly indicated the plan then was to limit it to the China market, the story was still the most read one in ChannelBuzz in 2015.
What makes SAP Anywhere of such interest? It is a front-office CRM suite, which manages sales, marketing, e-commerce and inventory. Unusually for an SAP offering, it is targeted primarily at the smaller end of the SMB market. While SAP isn’t claiming that SAP Anywhere is simpler and easier to use than other CRM products aimed at small business, it does claim that SAP Anywhere offers a lot more functionality for the same level of simplicity, handles B2B as well as B2C with ease, and has the advantages of HANA analytics.
“It doesn’t provide anywhere near the same level of detail as SAP Hybris, but it is aimed at a much smaller market, and is in a completely different price range,” said EJ Jackson, SVP and GM of SAP Anywhere. “This is for businesses who have outgrown the free or almost-free offerings like GoDaddy that cater to the microbusiness market. These companies may be selling on multiple e-stores or multiple brick and mortar stores. They want a multi-channel commerce site. They want the capability to manage a mobile system effectively. They want to have a single point for inventory, so they aren’t advertising stuff on Amazon that they are sold out of.”
Jackson said that there is a huge gap between the very low-cost CRM offerings, and proprietary systems designed by consultants, which can often be quite expensive, particularly for a small business budget.
“We typically don’t lose deals because of price,” Jackson said. “We don’t run into name vendors a lot. Our biggest challenge is usually convincing a business that it’s time for them to move on from Excel.” Pricing, which is public and on their website, starts in the $500 dollar range for five users, a GB of data, and two channels. Their Premium Package, which supports an unlimited number of users, costs up to $1200 a month.
Interestingly, Jackson said that their customers fall into two buckets – those who are implementing their first CRM solution, who are often slightly older customers, or those who are using SAP Anywhere to replace multiple solutions, who he said were much more likely to be younger.
“Many millennials are more likely to use us as a replacement because they tended to invest right away in systems and infrastructure when they began their business,” he said.
L.A.-based M.R.K.T., which makes fashion accessories, is an early adopter SAP Anywhere customer which falls into the ‘millennials upgrading’ category. While they began with retail stores in China, they are also distributed in the U.S. and in over 20 countries worldwide.
“Everyone needs a system, especially when doing wholesale orders, but we were using four programs from the start of the customer placing the order to invoicing,” said Adrienne Fong, Operations Manager for the company. “After the order was placed, we had to use one program to check inventory, another to get the order to the warehouse so they could ship it, and then QuickBooks for invoicing. Having so many separate systems to do one thing was time consuming. We also had to manually enter information for four separate sites, whereas we now we have one point of entry.”
Jackson said that SAP Anywhere has over 500 customers signed globally — 400 of them in China where it launched first, with most of the rest in the U.K. and a few in the U.S.
“The feedback has been very, very positive,” he said. “None of our paying customers have churned.” He noted that while a 3-4 per cent churn rate is best in class, with this product, SAP aspires to get to negative churn, where any customers they do lose are offset by the growth in the revenue base from among other customers.
“Demand is coming from everywhere, although most of our customers are in the 5-50 person range, with a handful over 50,” Jackson added. “We have a great feature set for the 10-50 space, but we do need to grow our feature set for companies larger than that, and we will do that.”
So why, given this great demand, has the Canadian launch been put off, with no determined time frame? Jackson explained that it’s because of a reorganization that took effect in early April. SAP Anywhere, along with existing SMB-focused solutions SAP Business One and SAP Business ByDesign were moved from the partner organization framework, where they reported to Rodolpho Cardenuto, President of Global Partner Operations, to Steve Singh’s group, which is responsible for new growth areas of the company, and also includes Concur Technologies, Ariba and Fieldglass.
“Steve is a startup guy, who is very focused,” Jackson said. “We had already launched in China and were set to launch in the U.K. and U.S. – collectively 40 per cent of the world’s GDP. He decided to reach critical mass in those markets before we expand further. As a result, our strategy is now to focus on those three geos, and get critical mass before expanding further.”
Of course the original plan was to limit SAP Anywhere to China to allow it to get scale and critical mass, and that decision was changed because of demand, so it’s possible that the decision to forego Canada might be revisited. Given the explicit definition of the strategy, however, it seems more likely that Canada will have to wait – with late 2017 or 2018 being possible dates to see SAP Anywhere north of the border.