SAP is exclusively targeting it towards the mid-to-large enterprise market, which comprises the majority of its 100,600 installed base worldwide. Shai Agassi, president of SAP’s product and technology group, made the announcement from SAP’s office in Palo Alto, Calif. with a simultaneous broadcast from New York.
“There’s a lot of pent-up demand in those markets so we’re naturally going to serve where we think the most obvious opportunity is right now,” said Robert Courteau, president and managing director of SAP Canada. “It’s about going to a place where they’re going to value our on-demand opportunity.”
Courteau declined to comment further on SAP’s strategy on capturing market share in the small and medium business segment, where Salesforce.com currently dominates.
Netsuite
Sean Rollings, senior director of product marketing at NetSuite, however, said it expected SAP to serve small and medium-sized businesses with its new product. NetSuite provides Web-based CRM, ERP and e-commerce software to the SME market.
“They’re trying to create a fortress SAP for their installed base and are obviously getting picked off by their competitors, who’ve been very successful in bringing hosted CRM to people that only have the ERP back-end,” said Rollings. “It doesn’t seem that they’re targeting new business and new companies.”
SAP is a latecomer to the hosted CRM market and is up against some stiff competition like Salesforce.com, which was originally designed to be a hosted service, and Siebel, which brought out its equivalent product more than a year ago. More recently, Microsoft introduced Dynamics CRM 3.0 On Demand. Unlike Siebel, which was acquired by Oracle last September, or Microsoft, SAP is not tied to any database.
SAP is offering its hosted CRM service starting at US$75 per user per month up to $125 per user per month (Canadian prices are equivalent). SAP’s pricing strategy is on par with competitors like NetSuite, which offers a similar service around the $75 mark.
Aside from affordability, one of SAP’s biggest concerns with hosted CRM is being able to make it seamlessly integrate with other applications.
“The technology should address processes and people’s needs rather than technology for technology’s sake,” said Joel Martin, vice-president of the solutions advisory service at IDC Canada. “The corporations are demanding these resources be centralized rather than being all over the map. That’s been the biggest challenge with marrying this borderless organization with all these disparate technologies.”
To achieve seamless integration, SAP is currently working with Microsoft on the Mendocino project to further integrate with Microsoft desktop applications.