ORLANDO, Fla.--Looking over its shoulder for Microsoft, SAP on Wednesday said it will roll out its suite of business applications for small and midsize companies later this year. The German software company said Business One would be available in Germany in the third quarter and in the United States in the fourth. The new applications are built on technology acquired earlier this year when SAP bought Israeli company TopManage Financial Solutions.

Even though Bill Gates, chairman and chief software architect of Microsoft, has said he doesn't plan to take his company into SAP's enterprise-applications market, SAP executives at the E-business conference appeared suspicious. "The thing that impressed me today was the amount of chatter that SAP has been making about Microsoft in their space," says Byron Miller, an analyst for Giga Information Group. "I expect to see that heat up." Indeed, during his keynote at Sapphire '02, SAP co-chairman and CEO Hasso Plattner challenged the Redmond, Wash., company to support the Java platform, used to run many of SAP's and other companies' Web-enabled business applications, on Microsoft Windows. "Mr. Gates, tear that wall down now," Plattner said, echoing President Reagan's call to Soviet leader Mikhail Gorbachev to tear down the Berlin Wall in 1989.

During the last 18 months, Microsoft has spent $2.4 billion to buy Great Plains Software and Navision, which make enterprise resource planning and customer-relationship management software for the SMB market. Microsoft is unlikely to sell its business applications to global SAP customers looking for business applications for small divisions. However, the two will certainly battle for new SMB customers, a market where enterprise-focused SAP has a disadvantage. "In my opinion, SAP has its work cut out to establish share in this market," Giga analyst Paul Hamerman says. SAP Business One applications focus on accounting, logistics, sales-force automation, and business reporting in 11 vertical industries.

In other announcements at Sapphire '02, SAP said that in the fourth quarter, it will roll out xApps, applications that provide specific business functions and run on the mySAP Technology platform, a collection of infrastructure software. The first xApp will be for Resource and Program Management, which helps companies track and manage projects. XApps are being built with consulting firm Accenture. As a new addition to the mySAP platform, SAP revealed the availability of the SAP Exchange Infrastructure, which enables XML-based application integration.

On the customer front, SAP said Nike Inc. had deployed SAP's Apparel and Footwear Solution as the foundation of Nike's supply-chain system. Last year, Nike had blamed a quarterly sales shortfall of as much as $100 million on a botched implementation of supply-chain management software from i2 Technologies. last year after failing in a deployment of that company's supply-chain management software. SAP also revealed a technology and marketing agreement with Adobe Systems Inc. that includes integrating the latter's Acrobat and Adobe PDF technology with mySAP.