January 30, 2006 2:13 PM PST

SAP to debut hosted CRM service

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SAP is expected to debut on Thursday a hosted CRM software service, as the business applications software giant steps into an increasingly crowded field.

SAP plans to provide details of its long-awaited hosted customer relationship management (CRM) service during a media briefing in Palo Alto, Calif., and New York, a company spokeswoman confirmed. She declined to provide further details of the new service.

SAP has said previously that its offering would be different than its CRM competitors. For SAP, the need to differentiate its hosted service is imperative, given it is a late comer to the market. Siebel Systems, which rival Oracle is acquiring, has a hosted CRM service, and competitor Salesforce.com has had such an offering on the market for years.

SAP executives have said they wanted the company's hosted CRM service to offer not only ease of use but also capabilities similar to its licensed applications. The company also has said it wants hosted CRM customers to have the flexibility to buy, install and run its CRM applications without disruption when migrating from its hosted service.

One chief concern for SAP has been the inability of current on-demand applications to effectively communicate with other systems. For example, SAP has said it would like its on-demand CRM service to link in real time to a company's inventory system, in a move to expand beyond just recording order information.

But whether such features will emerge on Thursday has yet to be seen.

In speaking about the hosted CRM market overall, Rob Bois, research director with AMR Research, noted that vendors are striving to offer some form of customization, such as customized tags, when integrating Web services.

He noted that SAP has its work cut out for it, given the lead that Salesforce.com, designed to be a hosted service from the get-go, has had in the market. Meanwhile, Siebel has been in the hosted CRM market for more than a year and already has an SAP-like business model in that it also sells licensed software.

SAP's entry into the hosted CRM market has been slow. Last April, the company indicated it had no desire to jump into the arena. But then in July, it began showing signs of interest.

And while the company previously stated it expected to deliver a hosted CRM offering in the fall, it has been delayed by several months.


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