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Denise Holland CeBIT Germany Trade Show Review

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 By Denise Holland

Home Country Favorite SAP Steals The Show

Germany's CeBIT (Center of Office and Information Technology) trade show was held March 1 through 5 in Hannover, and occupying over 1.4M square feet, with 4,200 companies from over 70 countries displaying their wares and welcoming several hundred thousand visitors make it the largest IT event in the world. CeBIT attracted 335,000 visitors last year, and estimates this year put attendance at about the same mark.

For the first time CeBIT featured four central user-oriented platforms of CeBIT Pro (for business), CeBIT Gov, CeBIT Life and CeBIT Lab. However, the newest theme to attract central attention since this trade show began in 1970 is the clear rise of cloud computing.

According to Ernst Raue, the Deutsche Messe Management Board member in charge of CeBIT, "The cloud is a hot item throughout the industry, and is driving fundamental changes in all sectors. CeBIT showcased a raft of applications here, boosting acceptance of cloud technologies and resulting in significant numbers of deals being signed. These five days in Hannover have demonstrated the huge potential of cloud computing."

While the CRM and ERP software industries were fairly well represented, it was SAP who occupied nearly all the air in the business applications category. SAP delivered a preview of its Sales OnDemand, a SaaS application company executives referred to as 'Facebook for the enterprise' in a seeming comparison to Salesforce.com's Chatter solution. Sales OnDemand is not a full CRM suite, but instead purpose built for the specific goals and business processes of sales professionals.

SAP executives appeared confident that this SaaS CRM application will succeed where its predecessor did not based in part on a new design which focuses on how people work. According to John Wookey, executive vice president Business On Demand, "CRM OnDemand was based on taking the on-premise CRM application and creating a hosted version of it and making some minor changes," Wookey said. "The (prior version) product wasn't that bad and, some customers were pretty successful, but it wasn't going to let us compete effectively in the market."

Sales OnDemand is developed on the Business ByDesign multi-tenant architecture, thereby tapping into an integrated suite of tools and broad Enterprise Resource Planning (ERP) application suite. The upcoming Sales OnDemand release has redesigned the user interface, for a more social-like user experience. "It's a really different product … The design is very compelling. You're looking at activity streams, Xcelsius-like reports in the background. It's really designed for the sales user not management," commented Ray Wang, founder and analyst of Constellation Research Inc.

SAP's entry into the software as a service market was in large part intended to stop the erosion of existing SAP customers acquiring Salesforce.com for their CRM needs. The initial release date was missed by approximately two years, and the current release has been lamented for software quality and performance problems. However, as CRMsearch.com's Chuck Schaeffer commented, "SAP is somewhat similar to Microsoft with their initial go to market product releases. The first version is often late as they prefer to push back dates rather than reduce the scope of the product, and frankly, it often takes them a few versions to get it right. But once they do it get it right, stand back, as they have the resources, brand and channels to satisfy market demand and pick up market share very quickly."

To be successful, SAP may need to move more quickly. When they first entered the SaaS CRM market, they were trying to stem the tide of Salesforce.com penetrating their customer base. Now over two years later Microsoft has dramatically elevated their CRM on demand industry position, with the latest release of Dynamics CRM 2011, and Oracle is also advancing their Oracle On Demand solution. The competition is fiercer, with both Microsoft and Oracle pushing hosted CRM pricing downward. Dynamics CRM is priced at $34 per user per month and Oracle at $70 per user per month. Pricing for the upcoming SAP Sales OnDemand is expected to be announced at the next Sapphire annual user conference. SAP's Wookey acknowledges the industry price movements, but also recognizes price is only one factor in value. "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". End

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