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SAP fails to unveil on-demand service

Swiss-cheese time for A1S

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SAP has crashed Salesforce.com's annual Dreamforce conference with its own event, trumpeting its long-awaited on-demand business applications challenger.

But despite years in the development labs, SAP failed to deliver a knockout blow. It talked up the importance of its own on-demand service - and the shortcomings of Salesforce.com's - but it didn't give a detailed features list or a precise date for general availability.

Executives from the world's largest provider of business applications chose New York City's Nokia Theater to deliver a highly-polished demonstration of how customers could one day sign up and use A1S,which is now called SAP BusinessByDesign.

Subtly playing to criticism that Salesforce.com is "just" customer relationship management (CRM) software, executives explained what it takes to deliver a complete, on-demand "solution". But they carefully avoided saying if BusinessByDesign featured any of what they'd just described.

SAP walked an invited audience of press, analysts and bloggers through sign-up and use of integrated financials, human resources, CRM and analytics with the addition of voice over IP.

Customers cannot yet sign up to BusinessByDesign through the SAP website - which was presented as one feature of the service - and they cannot yet review BusinessByDesign's features, which SAP say will also be on that site. The current site instead features a PDF outlining business areas that will be supported.

SAP had pledged users will be able to view BusinessByDesign's details online, sign-up and configure an account, with set-up taking place within five minutes.

Meanwhile, SAP isn't declaring general availability - instead saying it's working on a "completely new business" and this naturally took "some time and intelligence." Executives claimed to be working through a pipeline of 20 and 300 customers on an invitation-only basis, and once this was completed, they'd be "ready to go on volume."

The business SAP wants apparently involves living off royalties and pricing. US pricing, announced today, will start at $149 per user per month for a minimum of 25 users with those requiring "limited access" to the software qualifying for the special rate $54 per month for five users.

Partners are an important component in driving uptake. SAP will look to partner companies to provide applications and hosting, and - apparently - to create reference implementations that it seems will act as templates for developers to customize applications and interfaces to the needs of verticals. So far, SAP has just three reference implementations.

Despite holding off on general availability data, SAP announced some big rollout goals for 2008. It expects coverage in the UK, France, China, Australia, India, Asia Pacific, Italy, Spain, India, Mexico and the Americas, having started initially in the US and Germany.

SAP believes BusinessByDesign will suck in 10,000 mid-market customers, with between 100 and 500 users, during 2008 and 2009. That's slightly different to SAP's earlier stated target market of businesses with between 50 and 500 users.

It's hard to see how SAP can hit its numbers, as the company is clearly validating the business model. SAP is working with 20 partners and while it plans to "accelerate partner rollout in the first quarter of 2008" it will be SAP's own direct sales team that sign up initial customers to prove the market and tempt partners.

Glossing over holes, executives continued to talk big on the importance of BusinessByDesign and its ability to surpass anything currently available.

Chief executive Henning Kagermann called BusinessByDesign "the most important announcement" of his career and "not just a new product... it's much more. It's a new era for us.

"We will set a new standard in business software for mid-size companies and we plan to change the on-demand market place," he said. ®

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