SAP AG is widely being tipped to detail a brand new on-demand CRM service offering that will rival that of salesforce.com Inc at media events in California and New York later this week.
SAP officials are keeping their cards close to their chest before both events which are scheduled to take place this Thursday. But if the rumors are true, then it will be SAP’s first major salvo into the so-called software-as-a-service CRM application space.
Salesforce.com, which more or less pioneered the hosted or ASP model for CRM, wasn’t overly concerned with the possibility of having to go head-to-head with the German software giant. In fact a bullish George Hu, senior vice president of applications at salesforce.com, even welcomed the move by SAP saying that it further validated the on-demand applications software market.
Hu likened it to a defensive move pointing out that salesforce.com’s on-demand model was starting to make deeper inroads into SAP’s customer base. They’ve seen our momentum, he said.
A move by SAP into the Saas applications space has certainly been on the cards. Bill McDermott, SAP America’s CEO, said last year that an easy to deploy and competitively priced on-demand CRM platform would be a good first step towards companies moving to a full mySAP enterprise CRM offering.
Industry analysts note that the SaaS model is well suited for small and medium sized businesses, a market that SAP has recently shown signs of addressing more aggressively now than in the past.
Industry researcher AMR pegs the CRM applications market at around $4bn. Hosted applications account for approximately $403m.