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SAP has tried to deflate Salesforce.com's latest update event by announcing competing products and services for the mid-market.

The business software giant has launched the long-awaited update for its mid-market All-in-One suite, introducing integration with Microsoft's ubiquitous Office.

Integration is based on the same capabilities as SAP's bigger mySAP 2005, launched last year, and means that All-in-One users can access SAP and exchange data through their desktop using Word and Excel.

That could be an incentive for a group of users deeply affiliated to Microsoft's operating systems and applications to move to SAP.

SAP today also signaled its intent to launch a software as a service (SaaS) offering, specifically targeting small and medium businesses (SMB) in the first half of 2007. It refuses to provide more details, but it already has the OnDemand Solution, launched almost a year ago.

SAP's news outburst appears to coincide deliberately with today's launch in San Francisco, of Winter 2007, the twenty-first update of Salesforce.com's hosted offering. Winter 2007 introduces a significant change at the interface layer, but goes in the opposite direction to SAP - away from the traditional client/server-based model. This month is the first anniversary of AppExchange a forum for hosting and downloading business application that use Salesforce.com.

Winter 2007 puts "more" AJAX functionality in Salesforce.com applications, for users and developers to build richer and more interactive interfaces. Previously, Salesforce.com used Java on the server to generate HTML web pages. It is now using more JavaScript on the client and using XML to pass data backwards and forwards to the server, to provide what it's calling a "Web 2.0 interface to CRM applications".

"We are giving more power and flexibility to customers. People can start to do things like build new buttons and screens using AJAX," Ariel Kelman, senior director of platform and product marketing, told The Register. That is a big difference from SAP, which needs "an army of consultants" to customize, he added.

Winter 2007 also sees Salesforce.com's "open beta" of Apex, its Java-like, "on-demand" programming language, announced last year. Apex uses a set of Java class libraries to reference code and can be accessed by SOAP and XML through a Web Services API or an AJAX toolkit. Salesforce.com launched a preview of Apex for developers that register through its website. Feedback and enhancements will be made available later this year, with the official customer launch of Apax. An Apex Toolkit for Eclipse and an Apex Wiki is launched today.

Growth is the goal for both Salesforce.com and SAP. Salesforce.com has 27,100 customers, with 556,000 subscribers. Having taken off in the mid-market, Salesforce.com has earmarked enterprises for expansion. The Winter 2007 suite and Apex will, according to Kelman, enable stretched enterprise IT teams to do more with less.

For SAP, SMBs are its route to a corporate goal of 100,000 customers by 2010, up from 34,000 today. Thirty per cent of SAP's business comes from SMBs today, but the goal is for between 40 and 45 per cent by 2010. ®

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