SAP Ventures Into SaaS

Get ready for acronym soup: SAP is venturing into the realm of SaaS. The renowned enterprise software vendor is making its first line of business management tools available over the Web, thereby staking a huge claim on the relatively nascent area of software as a service.

While SaaS has been around for a while, it's always been dominated by smaller players, especially Salesforce.com. SAP is the first enterprise-class vendor to step in -- although Microsoft has announced its Software Plus Services initiative. More on that once someone can actually explain it to us.

SAP's first strike into SaaS is a management tool targeted toward medium-sized businesses. Code-named A1S, it was unveiled in New York earlier this week. SAP says nearly 100 companies have taken A1S out for a test drive. It also says it's prepared to invest as much as $500 million on final development and testing by the end of 2008, although the product should be available in a full release version by the first quarter of next year.

By jumping into the world of Web-based applications, SAP positions itself against Microsoft and Google, which recently put out its own family of online apps. The Google apps are more for personal and office productivity, while the SAP tools are for larger business management functions, so they probably won't be stepping on each other's toes too much.

How do you feel about SaaS? Are you heading toward a hosted world? Have you dabbled in SaaS, dove right in or left it alone? Let me know at llow@redmondmag.com.

Posted by Lafe Low on September 19, 2007 at 11:57 AM