SAP to launch CRM-on-demand product

SAP plans to announce a new CRM-on-demand service at a news conference on Thursday.

Amazing what a little competition can do: SAP is poised to launch a new on-demand business application that, for years, it avoided offering.

The Walldorf, Germany, vendor plans to announce on Thursday at a news conference in California, a new on-demand model for its CRM (customer relationship management) software, it said in a conference invitation.

Officials declined to discuss the planned announcement ahead of the event.

The company's move to provide an CRM-on-demand product comes as companies such as and NetSuite Inc. have steadily attracted customers to their on-line offerings.

SAP has been reluctant to provide a hosted CRM-on-demand service largely to avoid cannibalizing business with customers who have acquired a license to install and run its software on their own computers.

Chief Executive Officer (CEO) Henning Kagermann has also argued that the new service would require investments in hardware and data centers, and wasn't seen as a high-margin business.

Asked specifically in a 2004 interview about a CRM-on-demand product to counter Salesforce's offering, Kagermann said a move in that direction would require SAP to build up a new line of business. "To be honest, we have higher priorities," he said.

On Thursday, CRM-on-demand will have officially climbed a notch higher on SAP's priority list.

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