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Sapphire: Over to Lars for the Cloud forecast

14th May 2012
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With all eyes on Lars Dalgaard’s maiden address as SAP’s new head of all things Cloud at Sapphire on Tuesday, co-CEO Bill McDermott’s let slip that the firm considered canning Business ByDesign.  

Business ByDesign was launched as a low-end Cloud ERP offering in September 2007 with a target take-up of 10,000 by 2010, a number that didn’t last long.
ByD has since been re-launched and repositioned, but still has only around 1000 customers worldwide. 
Earlier this year SAP completed its $3.4 billion takeover of SuccessFactors and in the process acquired its CEO Dalgaard as the overall head of Cloud strategy for SAP.  
On Tuesday Dalgaard will present his vision for SAP and the Cloud in a keynote address at the Sapphire user conference in Orlando. 
But on the eve of the conference, McDermott told Dow Jones in an interview, that the future of ByD had been called into question. "There probably was a moment where it (ending the development of Business ByDesign) was an option," he admitted. 
Dalgaard has quite a challenge on his hands. He will be be expected to articulate how SAP plans to generate 2 billion Euros from the Cloud by 2015 as part of the wider SAP goal of topping 20 billion Euros in revenue by then. 
Morgan Stanley analyst Adam Wood told clients in a note: “It is critical for Mr. Dalgaard to demonstrate how he will integrate the SuccessFactors’s and other Cloud applications into SAP’s core systems, without impeding SuccessFactors’s innovation. As companies become more willing to run applications in the Cloud, we believe the integration question could become more important.’’

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