It’s been a little over a year since SAP® announced the acquisition of hybris. Today’s post will share what sort of things I’ve been seeing in the market over that period of time.
Hybris SAP® update
To begin with, there is no doubt that SAP® is real serious about making sure hybris gets traction in the SAP® client base. We’ve heard of very deep discounts being offered in order to establish “reference accounts”. Our conversations with the Gartner group confirm up to 95% discounts in many cases. So if you’re thinking about moving to hybris, now is the time to do it! :-)
However, just like I wrote back in 2009 when SAP® was giving away CRM licenses, “free” may not be much of a bargain for many of SAP®’s clients. You still have to implement the software and you’ll eventually have to pay full freight on the maintenance for the software licenses. We’ve heard that table stakes for simple implementations start at $750K and annual license fees could be in the hundreds of thousands per year. That’s a lot to swallow for the Industrial B2B Manufacturer who is an eCommerce newbie and for those organizations who may never generate more than a couple to several million dollars of revenue through their websites.
However, these SAP® hybris discounts are great for growing the hybris partner network. As I walked the floor at SAPPHIRE 2014, everyone seemed to have miraculously grown a hybris practice over the 11 months since the announcement of the acquisition.
Speaking of SAPPHIRE, I had the opportunity to interview senior executives from Alfa Laval and Colgate while I was there. They are clearly the gold standard of reference sites for hybris in the SAP® B2B environment. I was totally impressed with the capabilities of their implementations. From an SAP® integration standpoint, they pretty much delivered all of the functionality that we provide. Real time price and inventory checks, order status for all orders (fax, phone, email, EDI and web), invoice payments etc. There is no doubt that the hybris platform can deliver the solution with a nice combination of batch and real time access to SAP®. The only catch is that each of those organization have spent almost 2 years getting there with the help of their consulting partners. They also now have 12-15 people on staff operating and maintaining the platform. That’s at least an annual expenditure of $1M operating cost.
By contrast, our average client has ZERO full time staff dedicated to supporting our solution. Sure they have folks supporting SAP® and they have people doing their marketing. But they’ve had to add ZERO incremental staff to support their eCommerce infrastructure.
Because of these costs, and concomitant lengthy implementation cycles, we’ve seeing many company’s opt out of making the hybris commitment. In fact, we’ve witnessed several situations where prospective SAP® clients (some wanting to get off of their now defunct WCEM platforms) were flat out told by hybris salespeople to not even consider their platform because they simply couldn’t afford it. Some who were lucky enough to be allowed to evaluate the platform came away with the impression that it would be like going through another full blown SAP® implementation and didn’t want any part of that.
So…the rich are getting richer..once again.
The SAP® hybris platform is indeed a Rolls Royce solution. It is being supported by world class partners who have teams of people that they can provide to help you implement. Partnerships with Adobe and purchases of SeeWhy continue to evolve the power…and cost and complexity…of the SAP® hybris solution.
As one of our client’s CIO observed at SAPPHIRE, “SAP® is leaving us mid market companies behind”.
While SAP® promises to make the integration of hybris with SAP® for the B2B scenarios faster/better/cheaper in the future, in the mean time (and for the forseeable future), it’s a complicated custom consulting project, one that the mid-market cannot afford.
That’s a shame considering how incredibly powerful the hybris platform is when it plays the role of Product Information Management (PIM) for an organization. In fact, Forrester recently lauded the hybris PIM as an Industry Leader. So we’re going to do everyone a favor (except for the high end consultancies).
We’re going to bring the same architectural concepts and intellectual property that has made us a leader in the Magento/SAP® B2B eCommerce space to SAP® clients who want, but can’t afford, to implement hybris.
They don’t call us a disruptive company for nothing :-).
Stay tuned for further details.