Taking a shot at SAP and the recent launch of its hosted CRM offering, Salesforce.com Asia Pacific president and CEO, Steve Russell, said its new, on-demand rival is about seven years behind the game.

While claiming SAP and Microsoft are straining to understand the on-demand business model, Russell conceded they are "slowly waking up to the concept".

He was speaking at the launch in Sydney yesterday of AppExchange platform directory, which is a network of hosted applications, services and development efforts that allow customers to run their entire business on-demand.

The release extends Salesforce.com offerings to new areas such as finance, electronic signatures, document management, credit and collections, mobile workforce management and HR.

"I'm pretty certain right now we have a five-six-seven-year head start in building CRM on demand; we grew up on the Internet, we invented killer apps on the Internet, but we have noticed recently that Microsoft now 'gets' on-demand and CRM and just a couple of weeks ago SAP got it," Russell said.

"SAP recently released a press release stating it is not entering the SME business space, which was really a defensive move by SAP to protect its installed ERP customers and offer them some sort of on-demand CRM, so we [Salesforce.com] are very excited that the rest of the enterprise-type grandfather customers, Oracle, SAP, Microsoft are now understanding that the future is on-demand.

"Microsoft recently said in an internal memo it was concerned [about] companies like Skype, Google, E-bay and Salesforce.com, but Salesforce.com is not competing with Microsoft or SAP. SAP is dipping its toes in on-demand, but with Microsoft how can you go to a live, on-demand world?"

Analyst firm IDC says 80 percent of the Fortune 2000 will be looking to the Internet for business applications within the next two years.

SAP launched the initial piece of its first, hosted CRM service earlier this month with software running on IBM servers and the DB2 database.

The hosted service has out-of-the-box integration with SAP's back-end ERP applications.

Responding to the claims, SAP Australia CRM business development manager John Goldrick said the company isn't interested in being first to market, the focus is on meeting customer requirements.

"SAP entered the on-premises CRM market well after established competitors and today we have 46 percent market share in this segment of the market," he said.

Microsoft was unable to respond by deadline.