SAP responds to Workday's challenge with Financials OnDemand

It's the latest defensive effort from SAP to fend off cloud challengers

SAP is hoping to fend off increasing competition from cloud rivals like Workday with a new application, Financials OnDemand, which will be unveiled this week during the Sapphire and Tech Ed conferences in Madrid.

Financials OnDemand, now generally available, is powered by SAP's HANA in-memory database platform and based in part on the financials module from the vendor's Business ByDesign ERP (enterprise resource planning) suite.

But work has been done to make the new application "significantly richer," said Sanjay Poonen, president and corporate officer, technology and innovation products, in an interview prior to the conferences. And SAP has an additional advantage over rivals owing to its long history in the financial software market, Poonen contended. "Functionally, we're way ahead of everybody else."

Poonen didn't mention Workday by name, but that company, fresh off a red-hot IPO, is clearly on SAP's mind, particularly as Workday courts larger enterprises with its financial software.

Financials OnDemand's features include "easy configuration of end-to-end financial processes including order-to-cash and procure-to-pay," mobile-device support, embedded analytics and support for worldwide accounting methods and tax requirements, according to SAP.

It can scale up to meet the needs of enterprises, but SAP is mainly looking to sell it into midmarket companies as well as new divisions or branch offices of larger companies, Poonen said.

In the latter scenario, general ledger information from the Financials OnDemand application could be rolled back into a company's main on-premises SAP financial system in order to close the books each quarter, Poonen said.

Whether this tie-in will cost customers more money depends on the method used. SAP has developed a new service called HANA Cloud Integration that will be sold separately.

"Pricing for SAP HANA Cloud Integration for Financials OnDemand and other cloud apps has not yet been finalized," an SAP spokeswoman said via email. "Pricing is under consideration and will be made public in Q1."

"There are multiple choices for integration," she added. "SAP HANA Cloud integration is one of the options. With this option, SAP is providing customers with access to a cloud-based middleware service with an assured SLA and availability, and taking care of the infrastructure."

Customers who don't want to pay extra could use flat-file integration, Web services APIs (application programming interfaces) or, if they have it licensed, SAP's NetWeaver PI toolset.

Meanwhile, the Financials OnDemand launch comes as the latest salvo from SAP to fend off pure-play cloud competitors.

"SAP's going after the entire back office with their cloud strategy," said analyst Ray Wang, CEO of Constellation Research. "[Financials OnDemand is] one of many initial plays to stem the erosion by edge apps."

The vendor previously responded to Salesforce.com with a new CRM (customer relationship management) application called Sales OnDemand, and to Concur with a product called Travel OnDemand, for travel expense reporting.

"Each category is under attack by a cloud vendor," Wang said. "Hence they have to do this to be both defensive today and aggressive in the future."

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com

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Tags ConcurInternet-based applications and servicesapplicationsSalesforce.comSAPsoftwarecloud computingFinancial / taxinternetworkdaySAP TECH ED

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