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5/12/2006
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SAP Rolls Out More On-Demand Applications

The software vendor debuted on-demand marketing applications to complement the sales force automation service the company began offering in February.

Three months after arriving fashionably late to the on-demand CRM party, SAP last week debuted on-demand marketing applications to complement the sales-force automation service it began offering in February.

The expanded on-demand CRM lineup was unveiled in advance of Sapphire, SAP's annual customer conference being held this week in Orlando, Fla. One unanswered question is just how much commercial success SAP is having with its on-demand CRM apps: The company identifies only American Standard, Capita Insurance, and DuPont as customers, but it plans to disclose more this week and provide a report card on customer adoption of its NetWeaver application platform.


Catch-Up Plan
February: SAP Sales will provide account and activity management, sales analytics, opportunity and pipeline management



May: Campaign and lead management and customer segmentation will be available as part of SAP Marketing



Summer: SAP Service will offer customer service apps

Despite the addition of the marketing applications, SAP's on-demand CRM lineup remains rather thin. The company has promised to roll out new products on a regular schedule; on-demand customer service apps are on tap for this summer. But "it's going to be a year or more before they have a broad on-demand CRM offering," AMR Research analyst Robert Bois says.

SAP's main focus is still its core mySAP applications that run within the data centers of many large businesses. The company's strategy is widely seen as offering its on-demand CRM apps as a way to jump-start CRM usage among its ERP application customers and keep them from defecting to rivals such as Salesforce.com and Salesnet. SAP's on-demand apps are integrated with its conventional software and share the same data model, so changes made to records in the CRM service trigger updates in mySAP CRM software.

On-demand software sales accounted for only 6% of the $9 billion CRM market last year, according to IDC. But that could grow to a quarter of the market within five years as more businesses--especially small and midsize ones--turn to software-as-a-service options rather than buying and maintaining applications with their own staff.

SAP is trying to expand its share of the enterprise apps market while rival Oracle focuses on integrating applications in its E-Business Suite with those it acquired when it bought JD Edwards, PeopleSoft, and Siebel Systems. In March, SAP said that more than 200 companies had migrated away from Oracle to SAP applications under its Safe Passage program, which the company plans to expand next week. Salesforce, meanwhile, has been plagued by several system outages this year, a problem SAP hopes to avoid by running its on-demand applications on individual servers dedicated to a single customer.

More Features
SAP trails Salesforce in on-demand capabilities, though. SAP Marketing helps with campaign management, customer segmentation, and lead management capabilities. It also provides role maintenance and owner realignment features that are used to assign roles, access rights, and the ability to make changes to the data, which helps in customizing the applications to users' needs. Pricing for the on-demand sales offering, SAP Sales, as well as the marketing app starts at $125 per user per month. SAP also added sales pipeline performance management features to its on-demand sales application, and it added languages as well.

SAP said last week that it's creating a network of chemical industry customers and independent software vendors to accelerate the development of industry-specific applications on the NetWeaver platform. SAP applications are a mainstay in the chemical industry, and the new network includes Dow Corning, DuPont, and Eastman Chemical. SAP has a similar "industry value network" for the banking industry and is expected to disclose others at Sapphire.

This year also marks the first time Sapphire has been held in conjunction with the Americas' SAP User Group conference, which is expected to attract more than 6,000 SAP users. Those attendees will get a firsthand look at what SAP is doing to catch up in the on-demand CRM market against its vocal competitors.

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