SAP has announced it will add new e-commerce and Web-based CRM (customer relationship management) functionality to its Business One applications suite for small to midsize customers.

The software vendor obtained the technology through the recent acquisition of its partner Praxis Software Solutions, the latest in a string of purchases SAP has made to fill gaps in its product portfolio.

SAP and Praxis didn't disclose any financial details relating to the acquisition. All 12 employees at Praxis are joining SAP's Small Business Solutions unit, Dan Kraus, vice president, SAP Business One, wrote in an e-mail interview.

Praxis, a privately held software vendor in Minneapolis, already had a strong relationship with SAP and was a long-time Business One partner. Praxis has two products -- NetPoint Commerce and NetPoint Focus.

NetPoint Commerce is an e-commerce offering aimed at SMBs (small to midsize businesses) wanting to engage in online selling and marketing, while NetPoint Focus is Internet-based CRM software. Both products have been offered as extensions to SAP's Business One and were integrated into the application suite via the Business One Software Development Kit (SDK) tool, Kraus wrote.

SAP plans to maintain the Praxis software and support its customer base, he added. "This change will be seamless to all of the 100 customers using the products, all of whom run them with SAP," Kraus wrote. SAP is likely to continue offering Praxis software as stand-alone products as well as integrated with Business One, he added.

SAP is hoping the Praxis technology will differentiate Business One from other low-end business applications from Microsoft Corp. and Sage Group PLC. "With the addition of this on-demand functionality, SAP Business One will stand out from other offerings by providing more comprehensive business management capabilities -- covering on-premise and remote users and multichannel sales -- in a single, integrated software product," Kraus wrote.

SAP partners shouldn't be alarmed by the vendor buying a peer. "We have made it very clear that SAP will extend the core, horizontal functionality of Business One and leave the vertical extensions to partners," Kraus wrote. E-commerce and CRM have become "core pieces of functionality" that the majority of SMBs need, he added. Therefore, SAP had to meet those user needs directly by providing the capabilities as part of its application suite, not as third-party add-ons.

This isn't the first time that SAP has acquired a company specifically to boost the capabilities of Business One.

In January 2005, the German software vendor closed its purchase of iLytix Systems AS to incorporate the Norwegian startup's XL Reporter business reporting and budgeting tool into Business One.

Companies using Business One tend to have annual revenue of up to $US50 million and purchase the software through SAP's partners, Kraus wrote.