SAP (NYSE:SAP) has launched the latest version of its on-demand ERP (enterprise resource planning) offering called Business ByDesign which comes with modules for CRM (customer relationship management) and other business functions. ERP and CRM software constitute nearly 60% of the our near $62 price estimate for SAP. The other major players in this business are Microsoft (NASDAQ:MSFT), Oracle (NASDAQ:ORCL) and Salesforce.com (NYSE:CRM).
Business ByDesign to Drive SAP’s Growth in On-Demand ERP Market
SAP is currently the leader in ERP software, but it has been slowly losing ground to competitors. It arrived to the on-demand scene rather late, but its Business ByDesign offering has gained a fair amount of traction since its launch.
Business ByDesign is a fully integrated on-demand ERP solution that offers modules for CRM, SCM (supply chain management) and PM (project management). It is aimed at small and midsize companies. The company also has the Business One and Business Suite offerings for businesses wanting an on-premise ERP solution. Business ByDesign 3.0 comes with a number of enhancements including mobile support for Windows 7 and an improved SDK.
SAP currently has a 27% share of the ERP market, which is estimated to decrease to 24% by the end of the forecast period. If its on-demand offerings gains popular, it could gain market share in the on-demand at the expense of Oracle, Salesforce.com, Microsoft and Netsuite.
We have a $62 Trefis price estimate for SAP which implies a 10% upside to its current market price.