SAP launches first piece of hosted CRM service

SAP last week launched the initial piece of its first hosted CRM service, for on-demand sales force automation. The full offering, called SAP CRM On Demand, will add hosted marketing and services applications to the sales system later this year. The software runs on IBM servers with the DB2 database.

Beta site Du Pont has already deployed the sales force automation service, called Sales On Demand, in its global operations, said Michael Michlovich, director of marketing and sales for Du Pont IT.

Without offering specifics about the implementation, Michlovich said Du Pont is using the service to complement the packaged CRM systems already in use at the company. He declined to name the supplier of those systems.

The Sales On Demand service offers a common set of business processes to the significant part of Du Pont's sales force that relies on manual processes, Michlovich said. Over the long term, DuPont hopes to integrate the hosted system with its SAP ERP software and retire some of the legacy CRM applications.

Peter Graf, executive vice president of SAP product marketing, described SAP CRM On Demand as a stripped-down, easy-to-use version of the existing SAP CRM suite. As a "hybrid" system, the hosted service will offer out-of-the-box integration with SAP's back-end ERP applications.

Looking to avoid service disruptions like those that have plagued rival Salesforce.com, Graf said, the new service offers an "isolated" tenancy capability. With this feature, the whole hosted service won't crash as a result of the problems of a single customer.

The service is priced at US$75 per user a month and requires a full-year payment. However, the customer can opt out at any time and get a refund for unused months.

Aaron Nichols, general manager of IT at Ottawa-based Canada Post, an SAP ERP and CRM user, predicts that the hosted service will likely be reliable but says that he's not interested in using it.

"For a company of our size, with 10,000-plus full-time users, hosted solutions are not on the radar screen. I tend to view hosted solutions as more applicable to small and medium businesses," he said.

The hosted service appears to be aimed at SAP's installed base, which should help the firm stanch efforts by competitors to poach its customers, said Joshua Greenbaum, analyst at Enterprise Applications Consulting.

He noted that SAP is facing strong efforts by vendors of hosted CRM systems, including Oracle, to replace SAP's CRM software. "SAP needs to be defensive about that," said Greenbaum.

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