In an effort to target the midsized market, SAP and Hewlett-Packard Co. today introduced new preconfigured, hosted vertical industry enterprise resource planning (ERP) packages.
Extending their existing hosted software partnership, SAP and HP unveiled new packages priced on a per month per user basis. The new software products include implementation services from SAP and its partners, as well as maintenance and end-user training, support and application management. HP, described as the "data center provider" for the products, will provide infrastructure hosting, on-demand storage and managed Web solutions.
SAP has been beefing up its small and medium-sized business (SMB) strategy in the last year, and the new joint offerings are designed to reduce risk for potential new SAP customers, said Berkeley, Calif.-based Enterprise Applications Consulting analyst Joshua Greenbaum.
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"This is the welcome rebirth of an idea that will come to dominate the midmarket," Greenbaum said. "Hosted solutions for the midmarket are the most cost-effective and risk-adverse way in which a midmarket company can implement a comprehensive enterprise software solution."
SMB customers should benefit from the "insurance" HP can provide to the new products, Greenbaum said. "Having a strong partner like HP is essential to providing the security and viability insurance [for the new offerings]. The failures of the ASP model in the 'dot-bomb days' made many small and midsized customers wary of hosted models," Greenbaum said. "But there is no better way to put SAP technology and products in the hands of midsized customers."
The initial industries covered by the new SAP-HP announcement are fuel distribution, high-tech device manufacturers, technical service providers and consumer products food companies.
The software packages are designed for companies that may have HP systems in-house, but not necessarily -- and are not already SAP customers. The models do not include customer relationship management or supply chain management technology, for example, but do provide core enterprise resource planning capabilities.
"Clients with homegrown systems are great candidates for this," said David Booth, senior vice president for HP's enterprise customer segment sales. "Maybe they can't afford to keep it updated, or they have application software that is no longer competitive. It's a scalable product that is seamlessly clad as they go from being a $30 million company to a $1 billion company."
Booth said HP has the highest customer satisfaction ratings when its outsourcing model is compared with others. SAP is promising that each new solution model will have an "engagement manager" and committed service level agreements, so the availability of the service is committed by contract to the customer.
The monthly cost for the new solutions start at $325 per user.