SAP joins Web-based business software market

SAP is unveiling its new line of Web-based business management programs, code-named A1S, at the Intel Developer Forum in San Francisco.

Web-based software, also known as on-demand software or software as a service, has traditionally been the focus of smaller companies such as Salesforce.com and NetSuite.

SAP and other large competitors, including Microsoft, have previously combined programmes which reside on PCs with Web-based problems. However larger players are now moving towards a more purist model of software as a service.

SAP produces accounting, inventory control, shipping, sales and marketing software, mainly to enterprises with at least 500 employees. Most of its revenue comes from licenses for software installed on customers’ PCs.

Its Web-based software extends the company’s market to businesses with between 100 and 500 employees. With the software available over the Web, customers can pay monthly, without incurring large up-front payments.

SAP hopes the new model will help it grow its customer base from 42,000 to 100,000 by 2010.

A1S has so far been tested by less than 100 companies, but SAP now plans to invest around $500 million on A1S by the end of next year.

A1S will be rolled out in the United States, Germany, Britain and France by the first quarter of 2008. SAP expects thousands of customers to be using its Web-based software by early 2009.