SAP has been pretty quiet on Business ByDesign, its hosted business software service in development, but expect to hear more about it within the next few months. SAP told me today that Business ByDesign has reached a "mature" stage in its development.I shot an e-mail to SAP this morning following a Bloomberg story I read online with the peculiar title, "SAP to Cut Workforce in Rental Software Project, FTD Reports." Bloomberg reported that Financial Times Deutschland reported that an SAP spokeswoman said (stay with me!) that the company would reduce its workforce in that area to 1,800 from 2,600 "as large parts of the software are already developed…[and] SAP will transfer most of the programmers to its flagship project Business Suite."

I suspected this "rental software project" was Business ByDesign, and here is the e-mail response I got from an SAP spokesman:

"This is simply a reallocation of some development resources from Business ByDesign to Business Suite and other areas. The 'development' of Business ByDesign is now much more mature than in the early stages and therefore the development resources required are fewer than before. We now have the necessary number of people on Business ByDesign to continue to innovate around the solution, and are leveraging development expertise and know-how from the Business ByDesign efforts in other development areas across the company. This is long-planned and consistent with existing strategy."

Note the part about "leveraging development expertise and know-how from the Business ByDesign efforts in other development areas across the company," and remember that SAP recently hired former Oracle executive John Wookey to develop SaaS-like modules for core ERP systems.

Some might jump to the conclusion that this means SAP is shifting resources from pure SaaS to more of a "software plus services" strategy as it sees more potential for the latter. Or, as SAP implies, it simply only needs 70% of the resources it previously had working on Business ByDesign. Either way, expect SAP to bring more clarity to its SaaS strategy, on or around the time of the SAP user group's Sapphire conference in Orlando, Fla., in early May.