Technical notes to consider
*All three products listed here run on the innovative SAP HANA database** and leverage the new SAP Fiori user interface. Only Business One provides a second database option of Microsoft SQL Server.
**The underlying HANA database (released in 2010) differs from regular relational databases because it runs in-memory with data stored in columns, allowing for near-real-time analytics and computing capabilities.
SAP Business One
SAP Business One is SAP’s flagship product for targeting the small business market. Not originally built by SAP, it was acquired as a complete solution in 2002 and rebranded as SAP Business One for its US launch in 2003. Because it wasn’t developed by SAP, Business One is a departure from SAP’s highly complex ERP products. It represents a significant shift in simplicity while providing a robust platform with functional breadth.
The core product includes:
- Financial management
- Business intelligence & analytics
- Inventory management
- Project management
- Field service
- Mobile applications for sales and services
And goes deep into:
SAP also adopted a new sales strategy for SAP Business One. Instead of selling directly to small business customers, SAP developed a massive partner ecosystem of system integrators and value-added resellers (VARs) to sell, consult, add-on to, and adapt the product. While SAP does occasionally sell SAP Business One directly to their enterprise customers, over 98% of customers purchased and implemented this product via an SAP partner.
VARs have developed hundreds of SAP Business One add-ons that give customers inexpensive and easy ways to incorporate industry- and function-specific breadth and depth to their implementations. Today, there are over 400 SAP Business One add-ons, most of which are industry-focused to bring specialized functionality to various sectors. All add-ons integrate seamlessly, and when the system upgrades, the upgrade flows through to the add-ons.
Because of the extensive and committed SAP Business One partner network, deployment volume scaled quickly, and SAP Business One has 65,000+ customers.
Since its release in 2003, SAP Business One has undergone eleven significant version releases, resulting in a product that can be deployed/implemented quickly and at a cost reasonable for small, growing, and midsized businesses.
Read more about SAP Business One.
SAP Business ByDesign
Announced in 2007, SAP Business ByDesign is SAP’s first cloud ERP solution purpose-built for the cloud (and only the cloud). It sells as a software as a service (SaaS) product and was sold intermittently in the US and Europe until 2017, when SAP paused its marketing, unsure of its commitment to ByDesign. Marketing efforts resumed in early 2019, but partners and customers have been slow to accept the product; there are only 3,400 customers worldwide for ByDesign.
Ideal for the upper end of midsized businesses and subsidiaries of large corporations, ByDesign offers broad functionality but only delves deeply into financial management and accounting.
It provides the basics in other functional areas, including:
- Sales management
- Human resources
- Project management
- Purchasing & supplier management
- Engineering & production
With approximately 40 preconfigured end-to-end processes, ByDesign can be useful across an organization, but as one ByDesign reseller said, “ByDesign is a broad product but NOT a shop-floor-to-top-floor product.”
ByDesign has a few VARs that have developed add-ons to incorporate into their implementation. Most come from France- and Germany-based VARs, with a few in the US. ByDesign’s automatic quarterly upgrades don’t flow through to VAR add-ons, so additional consulting might be necessary to ensure add-on functionality remains operational.
One notable characteristic of ByDesign is that its code is ‘locked’ into the core product. Companies must subscribe to it as is; processes cannot be customized. Some industry analysts believe this is another reason for the slow uptake of ByDesign, as many companies want to keep their unique processes. However, ByDesign is a strong product at the right price for companies with these characteristics:
- Limited IT resources
- Using ERP for the first time
- Willing to adopt SAP’s business processes
- Requires strong financials and accounting
- Satisfied with broad, basic functionality outside finance and accounting
By “customization,” we mean that the core product code can be changed to suit an individual organization’s needs.
By “add-ons,” we’re referring to product extensions that add functionality, such as EDI integration to an eCommerce site or integration with a marketing platform like HubSpot or Marketo.
SAP S/4HANA (S/4) was released in February 2015 as the next generation SAP ERP. SAP’s CEO called it the firm’s “biggest launch in
23 years, if not in the entire history of the company.” S/4 is SAP’s new core product, replacing ECC and R/3. It comes in multiple editions, most with full breadth and depth of functionality (except for specific cloud versions, discussed in later sections).
The core, full-featured S/4 product targets the high end of midsized companies and large enterprises, making implementation long and often prohibitively expensive for companies with under $500 million in revenue. SAP also introduced a Public Cloud version of S/4, both in single-tenant and multi-tenant products, although neither is as feature-broad as S/4 (which we’ll address later). However, SAP focuses most of its cloud sales, marketing efforts, and budgets on S/4HANA Public Cloud when targeting growing and midsized companies.
Note: Researching S/4HANA Public Cloud can be confusing because there’s also a product called “S/4HANA Cloud” (note the dropped “Public” term). That product is a cloud extension of the on-premises, multi- million-dollar version, and we won’t address that product here, as it’s only appropriate for large enterprises. We focus on S/4HANA Public Cloud because it’s for midsized companies, is less expensive, and requires less IT overhead than other S/4HANA products, and SAP performs all maintenance and governance tasks.
Finally, S/4HANA Public Cloud provides mandatory quarterly product releases.
For years, several SAP enterprise-class customers (R/3, SAP Business Suite, S/4HANA) have also used SAP Business One for their smaller divisions, subsidiaries, or partners. This approach helps organizations adopt a classic two-tier strategy that ensures tight integration between applications used across the extended enterprise. Recently, large enterprises began using ByDesign and S/4HANA Public Cloud as secondary solutions.
Download the complete SAP Comparison Guide.