SAP Targets Small Businesses with New Business One ERP Offering

SAP (NYSE:SAP) announced a new version of its Business One ERP (enterprise resource planning) software offering, which is targeted primarily at small and medium sized businesses. ^[1] SAP is currently the one of the largest players in enterprise software, and has a majority share of the ERP software market where it competes primarily with Microsoft (NASDAQ:MSFT), Oracle (NASDAQ:ORCL) and Salesforce.com (NYSE:CRM). We expect its ERP market share to decline marginally through the forecast period, due to increasing competition.

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SAP Focuses on its Forte – ERP

SAP has traditionally been focused on on-premise ERP offerings for enterprises, but it has been looking at other markets to increase sales. It recently launched a new version of Business ByDesign – an on-demand, cloud based ERP offering – in a bid to capitalize on the rapidly expanding market for cloud based software. Even Oracle and Microsoft have been launching cloud based versions of their enterprise applications in the past year.

With Business One, it is focusing on small and medium sized businesses, by providing an easy-to-deploy solution which bundles resource planning, customer relationship management (CRM), inventory management, reporting, accounting, financial management and other functions in a single package.

With Business One, Business ByDesign, and its traditional SAP ERP offering, SAP now offers ERP solutions in all forms – on-premise & on-demand for small, medium and large enterprises. ERP (Enterprise Resource Planning) software accounts for around 38% of our $63 Trefis price estimate for SAP, which stands nearly 2% above its current market price.

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1. SAP updates Business One application for small businesses, Computer World UK [↩]