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SAP launches on-demand CRM

SAP announced its CRM on-demand offering, targeting many of its own customers in the upper midmarket with a subscription-based model that integrates into SAP back end systems.

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Add to Google NEW YORK --- SAP is moving into the CRM on-demand market by launching its own subscription-based CRM application for large and upper midmarket customers.

The Web-based CRM software's first release is comprised mainly of sales force automation (SFA) features including lead and pipeline performance management. Marketing and on-demand call center functionality with a service offering will be issued in quarterly releases later this year.

SAP said the product would initially target companies with at least 100 customer-facing sales agents. It will sell at $75 per user per month for the basic SFA capabilities up to $125 per user per month for the full suite once it is available. Customers can also cancel a subscription at any time.

SAP held dual press conferences Thursday at its research labs in Palo Alto, Calif. and at its New York City offices. During the past year, SAP executives, including CEO Henning Kagermann and SAP executive board member Shai Agassi, have been hinting that an on-demand product would come to market. @17914

The initial module, called SAP Sales On-Demand, will have account and contact management, activity, opportunity and pipeline management, a calendar feature that syncs with Microsoft Outlook and task management. Sales analytics is also included to provide lead generation, sales execution and client management tools.

The new offering is being rolled out in partnership with IBM hosting and consulting services. The two vendors have also reached a joint marketing agreement. IBM will host SAP's product at one of its 100 U.S.-based data centers using eServers on the DB2 database management system.

Agassi told reporters and analysts that SAP's on-demand strategy would allow customers to take a hybrid approach. The new offering was designed with a consistent data model and architecture based on SAP's NetWeaver platform. This allows the on-demand CRM application to integrate data with a company's SAP back end systems, he said.

"This will bridge the divide between on-demand and on-premise in that, over time, when a company grows, it can take its on-demand CRM on premise," said Agassi, who also serves as president of SAP's product and technology group.

Agassi also said SAP would not push companies to move from on-demand to on-premise.

The product also has a quick deployment cycle. A company that starts implementing it in the morning can be up and running by the afternoon, Agassi said.

Though per-user pricing is available, some features will only be available for an additional price, said SAP's Darc Dencker-Rasmussen, senior vice president of CRM solution management.

"Obviously, if customers want to start turning on additional capabilities there are fees associated with that," he said. "They may want to see sales history or some pricing configuration capabilities would be additional functionality."

Meanwhile, SAP's decision to target its own customer base with its on-demand CRM offering could signal the company's struggle in getting customers to deploy mySAP CRM, despite signing a lot of licenses.

"Our customers were looking for a product that they can deploy with minimal disruption," said Pat Bakey, senior vice president of North American CRM, for SAP America Inc.

The biggest boon for customers will be the ability to take an image of the on-demand CRM product and bring it on premise in the future, said Joshua Greenbaum, principal consultant at Daly City, Calif.-based Enterprise Applications Consulting.

"Customers that have been sitting on fence now have a good decision point that is really powerful for them and has full flexibility to grow and change as their business needs change," Greenbaum said.

Another big draw is SAP's isolated tenancy model, which hosts SAP CRM on a separate database for each customer, keeping data strictly separate, Greenbaum said. Still, customers will have to weigh their options based on individual business needs, he said.

"There's a lot of buzz about on-demand and on-demand is not by itself the end game," he said. "In the end it's providing the type of functionality your customers need."

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