Join us this week as Richard Duffy discusses how the cloud is a technology for the times.
Carl Lewis: Welcome to The Connected Enterprise podcast. I’m Carl Lewis, your host from Vision33, and my guest is Richard Duffy, a good friend from SMB Solutions. Richard, welcome to the podcast. Please tell us about yourself and SMB Solutions.
Richard Duffy: Thanks, Carl. I’m the founder and CEO of SMB Solutions Cloud Services in Australia—but some of you know me as a product evangelist for SAP Business One. During my 13 years at SAP, I helped launch SAP Business One in Australia and was responsible for the product in the Asia Pacific. Then, I joined SAP Business One’s global management team and became the global product evangelist. I traveled a lot and was at many ASUG conferences.
You also may have seen my videos. But if you haven't and you have insomnia, search for Richard Duffy and SAP Business One. You'll find hours of me talking about SAP Business One and how to use it to become a better business.
I also briefly worked for another cloud ERP vendor: Acumatica. It’s based in the United States, so I lived there for a while. I was also a product manager for Microsoft’s Dynamics GP, aka Great Plains, and a Great Plains partner for many years before that.
Since then, I’ve started a business that specializes in hosting SAP Business One in the cloud. We have customers in Australia, New Zealand, and Southeast Asia, and we just started adding European and Latin American customers.
We focus on hosting SAP Business One. Unlike Vision33, we don't sell or support it. We know Business One intimately and support the partners, but we don't support customers directly. That’s one reason partners send us their customers—there’s no conflict of interest. But they know their customers will never be the proverbial meat in the sandwich where the hosting partner says, “Sorry, it's not our platform. It must be your software.” When everyone knows the software’s fine. It's a balanced approach that works.
Carl Lewis: That's good. How has cloud deployment gone in your neck of the woods?
Richard Duffy: It's amazing because the messaging about SAP Business One—sometimes from SAP itself—is that Business One isn’t a cloud solution. It's an on-premises solution, and if you want an SAP cloud solution, you need product X or Y. But 70% of all new SAP Business One deployments are cloud deployments, and more customers are moving their deployments to the cloud.
Carl Lewis: What are the advantages of a cloud deployment versus an on-premises deployment?
Richard Duffy: Every year, customers—assuming they're not on a subscription license—pay an annual maintenance fee. That entitles them to the latest versions and technologies. But you must be up to date on your hardware and operating systems. And your hardware must be powerful enough to drive the new innovations. Things like the new Web Client, Service Layer, and API Gateway make SAP Business One a great digital core and allow it to seamlessly connect with many products, either directly using the Service Layer or through integration tools like Vision33’s Saltbox.
So, people need that processing power. And many customers find their hardware isn’t cutting it. It's too old, it's out of warranty, they’re at a point in their refresh cycle where they need to move, etc. That’s a big consideration. If you're an existing customer, COVID and the work-from-home movement drove much of that momentum. We saw a significant shift to the cloud before the pandemic, and it continued. The great thing about delivering Business One in a multi-tenant environment—I’ll talk about that in a second—is that it’s fast and easy.
For example, we migrated a customer on Friday. Their partners connected us on Thursday, they decided they wanted to do, and we spent an hour Friday afternoon migrating them from SAP Business One 9.1 on-premises to SAP Business One Version 10, Feature Pack 2202, which is the latest available version in the cloud. Customers want to move to the cloud quickly.
Another thing is affordability. Many customers have their SAP on a subscription model. They pay per user per month. They can add users any time during the year, and at the end of the year, they can reduce those numbers. People like that flexibility. You also pay for access to the hardware and the cloud hosting service on a per user per month basis. Our customers love that.
We do users for a minimum of one month, and we don't do contracts. We’ve never had a customer say, “This stinks, and we want out.” So, we've never lost a customer, and they can sign a contract if they want to, but we don't enforce it. To summarize: Access to the latest technology, the ability to be flexible in how they help their workforce be more effective, and affordability are the three key cloud drivers, Carl.
Carl Lewis: You mentioned what I call end-of-life issues. Many customers don't upgrade their systems until their servers or operating systems are end-of-life. Then it's, “I guess we'll update the software since we need a new server and operating system.” What changes when you're in a cloud environment—especially MTE? What happens?
Richard Duffy: MTE means multi-tenant environment. The cloud has two deployment models. In a single-tenant environment, you have your own cloud infrastructure—from the database server to the application servers that deliver the application to web servers and the servers that drive the Service Layer and Web Client, and even a domain controller that manages user accounts and security. You might need four or five servers, and you pay for all of it.
In a multi-tenant environment, all that infrastructure is there, but multiple customers can securely access it. Each customer has their own deployment, and it's secure and petitioned away from other customers. But they have access to the same power and flexibility while paying only for a share of the hardware. Customers are moving to MTE because of its affordability and deployment speed.
A customer running an SAP Business One version for HANA called us in a panic because their server had crashed. They’d never updated the server and were still using 2014’s version of SAP Business One. They paid their maintenance every year but had never done an upgrade. They also couldn't find their backups, or the backups were stored on the crashed server—big no-no. Luckily, someone made a backup at one stage, which we used to get them up and running. It took two days because we had to move them from one version, upgrade to another version, and upgrade to another version before we could take them to version 10.
My message for the audience is: Keep your SAP Business One updated! It’s even more important these days for security reasons. Cloud deployment helps because we upgrade our multi-tenant environment customers twice a year. SAP's release schedule says updates are quarterly, but there have been a few hiccups because they've been adapting to new security rules because more customers are using SAP Business One in the cloud. But we deliver upgrades automatically, twice a year, so in our cloud model, customers are always current.
Carl Lewis: Do those upgrades include server and operating system upgrades required by SAP's new version?
Richard Duffy: Yes, and that’s automatic too. Here’s an example. SMB Solutions’s model is different. Some partners, like Vision33, use Amazon Web Services for their multi-tenant environments. We don’t. We bought all our own hardware and deployed it in Equinix data centers. Amazon, Microsoft, and even SAP’s Business ByDesign use the same data centers. We bought our most recent servers for running multi-tenant HANA, and they’re all SAP S/4 HANA certified.
S/4 HANA is the big daddy of SAP systems these days. The HANA server was $85,000. We keep those servers and operating systems up to date. Windows has a “Patch Tuesday” every month where Microsoft fixes things—and occasionally breaks things! In September, they broke things for people running SAP Business One with remote desktop services. But I wrote a LinkedIn article about how to fix that.
Carl Lewis: I saw it. Very nice.
Richard Duffy: If you were running Windows server 2019 and Windows 10 or 11, there's a 95% chance that affected you. But we take care of all that. We tell customers, “Every month, on a Sunday at 3:00 am when everyone is asleep except our team, we run the updates and ensure the environment is secure.” We spend $180,000 a year on security, and we have an integrated security model—including two-factor authentication (2FA). Two-factor authentication is when you’re signing in and you verify who you are with another device, usually a cell phone.
If you can get 2FA with your deployments, do it. And use it. Many insurance companies won't give you cybersecurity insurance unless you use it. It happens with Office 365. Microsoft insists that administrators have 2FA and recommends everybody else does too. It’s critical, even in an on-premises deployment.
Carl Lewis: Absolutely. We see that too. Richard, you've advocated for SAP Business One as long as I've known you. That's how we met.
Richard Duffy: Yes.
Carl Lewis: You recently started a website for SAP Business One customers. Tell us about that.
Richard Duffy: We realized how accessible social media is. And every platform has Business One-related groups and sites. I used to be the moderator of a Facebook group.
I left Facebook, but I'm on LinkedIn. We found that people were contributing good content, but there was also a lot of garbage. People would post unrelated and irrelevant topics or endless sales pitches. I hate that, and I bet you and your listeners do too.
I never run out of things to say, and I have a broad knowledge base, especially with SAP Business One. So, I started the SAP Business One Community (www.sapbusinessonecommunity.com). I fund it. I have some of my team curating and managing it. We build content every week. No sales messages allowed.
It's just a bunch of what I hope is useful information for SAP Business One customers and partners. It’s the world according to Richard Duffy, because I want to ensure there's always regular content. We invite anyone with something valuable to say—like how to use the system better through standard functionality or a complimentary solution they discovered. No worries if you’re not the world's greatest writer, either. You can send us an outline of what you want to say, and our team will write it up in a blog. Then, you approve it, and we publish it under your byline. Great content comes from everywhere.
Also, I only speak English. Some people would say I don't even speak English because I’m Australian, but that's another story! But thanks to Google Translate, we’ve made the site multilingual. It's available in Spanish, German, Italian, French, and English. We can add more if we get requests for them. Google Translate isn’t grammatically perfect, though. An Italian partner laughed about some translations, but it doesn't detract from the core message.
Some languages don’t work. We tried Arabic because there are SAP Business One customers in the United Arab Emirates and the Middle East. But please, check it out. If you have content you'd like to contribute, you can send it to me or Taylor Pretty, the site curator. Side story: It’s a family business, and Taylor is my daughter. If the business grows, I'm stuck because I've run out of family members! We'd love to have you contribute.
Carl Lewis: That sounds great. One last question for you, Richard. People say we're either in a recession or on our way to one. What do you hear in Australia? How do things look?
Richard Duffy: It’s funny. There's a TV show called The Good Fight, and one character’s plan for happiness is to get off social media and the internet and stop doom scrolling the constant bad news. Anyway, it's fair to say there are economic headwinds. You’d have to be oblivious not to acknowledge that. But even with growing inflation and governments trying to prevent it by increasing interest rates, customers are bullish about their businesses.
Businesses are growing. It’s hard to find people because everyone's hiring because their businesses are growing. So yes, there are tough economic conditions, and I don't want to minimize that. But from a business perspective, businesses are investing and growing. This is why the cloud is such a technology for the times, Carl. It offers flexibility. It would be nice if SAP's contracts were a little more flexible, and you could move up and down during your yearly contract. We let customers do that with our cloud, but with SAP, you can increase any time but only decrease at renewal time.
The cloud’s flexibility makes it a great solution for businesses in uncertain times. But I don’t think it’s uncertain times. People often ask what I think. “Is Business One here to stay?” “Is it a good investment?” “Should I keep doing this?”
Well, every cent of my savings and all my retirement savings for me, my wife, and my children are tied up in our SAP Business One hosting business. We're ‘all in’ on SAP Business One. We're not holding off on our investments.
Carl Lewis: Still moving forward.
Richard Duffy: Yes. Customers are saying, “Now is the time.” If you, as my partner, like Vision33 or whoever your SAP Business One partner is, if you have the resources to do this project, do it. I encourage customers not to wait. Because these projects will build resilience. If things get tougher, you can build that resilience. You'll get to use the technology not just for its own sake but to drive real business benefits. That's the thing we see as customers move to the cloud. They do stuff and say, “We never thought we could do these kinds of things and have these technology projects.” But moving to a multi-tenant environment in the cloud made it possible.
Carl Lewis: Well, Richard, thank you for joining me. And for everyone else out there—stay connected.