B1 API Test Instance

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Hi all,

We are building a marketplace product and would like to be able to integrate with the SAP B1 systems of our users through the DI-API (using the Java Connector). We'd need to hook into inventory/ stock management as well as sales/ purchase orders and so on.

In an ideal world we would have our own stripped down test instance either in the cloud or installed on our own hardware which we'd use for development/ testing then we'd set up a sandboxed environment within each of our users' systems.

My question has several parts:

1. Is this how people normally approach this issue? Is it common to have a standalone test instance or to use a sandboxed environment in a production instance?

2. How plausible and costly would it be to set up our own basic instance of B1? Would we need to purchase a full-fat license or is there some sort of developer option?

3. How simple is it to set up sandboxed environments on existing systems?

Thanks in advance