HP, SAP Bring Enterprise Management Tool to SMBs

SAP (NYSE: SAP) and Hewlett-Packard (NYSE: HPQ) announced today they will jointly offer a business management tool that they say brings enterprise-level best practices to small and medium-size businesses.

The hosted software will be priced on a per-user basis, starting at $325 per month. SAP's software will sit on top of HP hardware in an HP data center. The cost includes training and maintenance. Customers will own the software and have a SAP representative assigned to them.

"We think this is really the most innovative offer in ERP business," Gary Fromer, senior vice president, SMB, SAP Hosting for SAP America told CRM Buyer.

Specific to Each Industry

The companies will be targeting businesses with 1,000-2,000 employees that manufacture and distribute fresh food including meat, poultry and bakery items and other packaged foods; oil and gas distributors; high-tech device manufacturers and technology service providers. Eventually, SAP plans to offer the solution to the 32 industries for which it already has specific enterprise management software.

SMBs have not had the advantage of this broad a solution in the past, John Nugent, executive vice president for sales at SAP America, told CRM Buyer. They mostly rely on niche players with generic solution, but that's not enough any more.

"SMBs are under siege from large corporations and from businesses around the world," Nugent said. "They need operating efficiency, not just an application with a low price-point. In a global economy, that's not cutting it anymore. They need to compete on a global basis. They need to be able to have operational efficiencies and world-class, industry-specific business processes."

Budget, IT Flexibility

Fromer also said that the monthly pricing allows businesses to take the cost out of their capital expense budgets and use that money on expanding and updating their plants.

Smaller businesses do not often have the flexibility to pull IT staff off day-to-day operational tasks to build specific software solutions that incorporate, for instance, FDA regulations for food industry companies.

HP's part of the offering is the operations, infrastructure hosting, storage-on-demand, business recovery solutions, managed Web solutions and security services. Financing is available through HP Financial Services.

And that's not all. "We're eating the dog food, so to speak," David Booth, HP senior vice president, Enterprise Customer Segment, told CRM Buyer. "We use this system ourselves."

Companies will commit to a certain number of users over the course of a contract, but they will be able to add more users if necessary.