SAP Business One gets new hosted, subscription model

Partners will be able to rent Business One licenses on a monthly basis and in turn offer customers subscription pricing

SAP's Business One suite for small businesses will now be available in a new subscription-based, hosted offering through SAP partners, the company announced today. Business One is sold exclusively through partners, who had already been hosting the software and in some cases selling it to users under subscription terms.

But those partners first needed to purchase Business One licenses up front from SAP, and then offer them to customers via subscription pricing on their own volition, said SAP spokeswoman Astrid Poelchen. Now, partners will be able to rent licenses from SAP on a monthly basis, and then offer them on similar terms to customers, she said. "It's a real pay-as-you-go model."

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Although partners could continue purchasing licenses up front, the new method should be easier on their finances, Poelchen added. Partners will also be able to offer more attractive subscription pricing to customers under the new system, she said.

SAP's backing may also help get the word out to customers about the subscription option more effectively than an individual partner working on its own, she said.

The new hosting option will be rolled out in phases this year. It is available now in China, Germany, India, Italy, Southeast Asia, Spain and the U.K., with other countries, including the U.S., coming later.

SAP is making the right move, says analyst Ray Wang, CEO of Constellation Research. "Subscription pricing is what [the small-business] market is looking for, and what the general market is looking for," Wang said.

In a related announcement Tuesday, SAP announced that a number of "starter packages" for Business One are now available.

The packages are fixed-price offerings that "comprise the basic finance, sales, purchasing, customer relationship management and inventory functionality databases that small companies need to run their businesses," SAP said. They are available in implementations involving up to five users. Customers can be up and running in as little as three days, depending on the complexity of the job, SAP said.

Starter package customers can upgrade to Business One's standard edition when they like, with no need to reconfigure the application, according to SAP. With the starter packages, SAP is looking to snare customers who have used Quickbooks or other accounting software, but then find they need broader functionality due to growth.

Chris Kanaracus covers enterprise software and general technology breaking news for the IDG News Service. Chris's e-mail address is Chris_Kanaracus@idg.com.

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