RealTime IT News

Competitors Await SAP's On-Demand Threat

SAP on Wednesday will finally show the world its first on-demand business application service. Dubbed A1S by SAP executives, the much-hyped and long-awaited software-as-a-service (SaaS)  offering geared for small and mid-sized businesses will be showcased during an SAP product event in New York.

Analysts say A1S represents a bold foray into uncharted territory for SAP. While few outside SAP know exactly what it will ultimately look like, the general consensus is that A1S was built on a future version of the NetWeaver platform.

It's expected to include its share of Web 2.0 bells and whistles, including widgets and mash-ups, to help users tap into and gather data from its core and applications.

SAP has watched as on-demand application vendors such as Salesforce.com  and NetSuite have snapped up small-, mid- and even some top-tier customers that prefer purchasing and developing business applications from a hosted provider rather than implementing full-scale deployments within their organizations.

Earlier this year, SAP CEO Henning Kagermann said the company plans to grow its total customer base from to 39,000 to more than 100,000 by 2010. Much of that growth, he said, will be tied to the SMB market. That's why the company has invested an estimated $500 million on the A1S launch.

The A1S launch has been delayed twice since SAP began praising it in December 2006, a sign to some that SAP understands how much is at stake.

"A1S is a big bet for SAP," Gartner analyst Dan Sholler told InternetNews.com in August. "This has to succeed or they will have a whole host of business challenges ahead of them. No one has ever proven they can sell this type of business technology this way. SAP is betting the profitability of the company that it will be able to do it."