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SAP Business ByDesign Returns to Gartner’s Magic Quadrant for Cloud Core Financial Management

After being excluded last year, SAP Business ByDesign has made its triumphant return to Gartner’s Magic Quadrant for Cloud Core Financial Management Suites. Let’s give a huge round of applause to all of the Teams that have worked on Business ByDesign over the past year and all of the partners who have supported our customers along this journey. Although this is an amazing accomplishment for SAP, you might be asking, “What’s a Magic Quadrant exactly? And what’s a niche player?”. I found myself asking the same questions, so I went ahead and did the research for you.

What is a Magic Quadrant?

Although sounding like something coming out of a Dungeons and Dragons book, the Magic Quadrant is a well-known and highly regarded report created by Garter across multiple markets every year. The purpose of this Magic Quadrant is simple: educate consumers on the various competitors in the market and compare their strengths and cautions so you can make an educated decision.

Source: Gartner (May 2021)

As you can see, there are four quadrants: Leaders, Visionaries, Niche Players, and Challengers. According to the Gartner website, each of the aforementioned categories can be described as follows:

  • Leaders execute well against their current vision and are well positioned for tomorrow.

  • Visionaries understand where the market is going or have a vision for changing market rules, but do not yet execute well.

  • Niche Players focus successfully on a small segment, or are unfocused and do not out-innovate or outperform others.

  • Challengers execute well today or may dominate a large segment, but do not demonstrate an understanding of market direction. (Gartner, n.d.)

Evaluation Criteria

The evaluation was based on the feedback of actual users of each of the products. To be considered for the Gartner’s Magic quadrant, vendors had to meet a few baseline criteria first. These criteria were based on product capabilities (core financial management applications), market presence, cloud service attributes, and pace of change. For a full description of these requirements, you can check out the report here, although you might need to sign up for an account with Gartner first.

As for the specific evaluation criteria, vendors were measured on two specific categories, ability to execute and completeness of vision. The criteria for ability to execute included product or service, overall viability, market responsiveness, and customer experience among other qualities. Completeness of vision evaluated market understanding, sales strategy, offering strategy, innovation, and geographic strategy.

What does this mean for Business ByDesign?

Business ByDesign was included as a niche player, but what does that mean? Well, by no means should niche players be looked at as a bad thing. The article on Gartner states:
“A Niche Player may be suitable for your requirements, and all Niche Players in this Magic Quadrant should be considered viable contenders. However, it is important to understand their focus and to check that they meet your business requirements. If you like what a Niche Player offers, your evaluation should assess how well-aligned that vendor is with the market’s direction.”

They also mention that niche players sometimes focus on project-centric or midsize enterprises, hence ByDesign’s inclusion in this category. The article also stated that ByDesign ranked in the upper quartile for client satisfaction.

Strengths Business ByDesign’s strengths were listed as viability, functionality, and extensibility. Citing its wide range of financial functionality, international capabilities, completeness, ease of use, value for money, ease of deployment, and flexibility, Gartner states that you should consider BD if, “you’re an MSE organization requiring strong global financial capabilities”.

Cautions Due to SAP’s marketing efforts focused on the complete ERP package, the capabilities for core financials are overshadowed in the marketplace. It also mentioned that SAP competes with itself in a sense though SAP S/4HANA Cloud and their sales strategy of selling ByDesign through partners.


I would recommend checking out the full report here if you’ve got the time. Go through and take a look for yourself to see how SAP is stacking up against its competitors! Business ByDesign entering the magic quadrant is only the beginning. ByDesign is always improving as new innovative features are always being added. Again, a huge congratulations to the teams working on ByDesign. Your work is being noticed!

I would love to interact and talk about some of the partners in this market moving forward. If you’re working with a partner and happen to be reading this, drop a comment below and let’s talk! I’d love to offer some more visibility within the community for Partners moving forward.

If you’re someone who’s interested in learning more or you have a specific question about your own business, I’d recommend dropping it here. You’ll be able to find answers from other people involved in SMBs just like yourself.

As always, make sure to follow the small to midsize business tag here to stay up to date with everything SMB!