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Words of welcome from SAP's hosted competition

As SAP jumps into the on-demand CRM market, established vendors have some interesting words of welcome.

"On demand is becoming the predominant model of delivering enterprise software. Siebel tried to make the switch to on demand, but couldn't. SAP is going to face similar challenges. It is more than a new delivery model; it is a way of thinking, of caring for customers, and a cultural shift that those vendors will have a very difficult time embracing.

But we appreciate SAP's validation of our business model and the future of computing."

--Greg Gianforte, CEO of RightNow Technologies Inc.

"SAP is making a surprising mistake by thinking software as service is a 'CRM' only phenomenon. Just as in the client-server market, the application that will ultimately win the next-generation application battle will be an integrated suite of applications designed to run the core business processes of a company. And you literally can't build an integrated suite starting with CRM - ask Siebel or salesforce.com that. You must start with ERP (as did NetSuite) as the base and branch out from there. So the important question is 'where is ERP as a service from SAP?' But I'm fine with SAP not addressing the back-office, because they will be leaving the fastest growing segment of the on-demand market - the ERP market - to NetSuite."

--Zach Nelson, CEO of NetSuite Inc.

"Is SAP on the defensive? Are they worried that with few customers actually using their CRM software, and salesforce.com making significant inroads in their customer base, their entire business model may be at risk? People who haven't followed our company closely often ask, 'Aren't you worried? A company with the resources of SAP can bring so much to this battle.' But that's exactly the problem. Observers tend to overestimate the creativity and innovation that entrenched technology companies can bring to a particular problem and underestimate the effect of business model conflicts that lurk behind the scenes. Siebel tried to sell an admittedly inferior on-demand product as an on-ramp to its on-premise system. It appears that on-ramps make road pizza out of your business model.

--Marc Benioff, CEO of Salesforce.com

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