SAP still seeking SaaS solution

Stephen Withers
Wednesday, 09 May 2007 14:04

IT Industry - Market

SAP's 'A1S' suite will deliver enterprise functions such as HR and financials as a service - eventually. Although the company has been working on it for three years, it won't be launched until some time in 2008.

Modelled in part on successful SaaS (software as a service) ventures like Salesforce.com, A1S will mark a major change to SAP's business model of selling software that customers run in-house, paying an initial licence fee and ongoing maintenance.

Also like Salesforce.com, A1S will allow developers to build applications that bring additional functionality to the platform. The package will present around 2500 interfaces, implemented using a service oriented architecture (SOA).

While SAP talks about A1S in terms of small and medium sized businesses, the Australian definition of SME (under $10 million turnover or less than 200 full time equivalent employees) is one or two orders of magnitude smaller than SAP has in mind (turnover in the tens or hundreds of millions of dollars).

If any company has a reputation for delivering software that requires a long and costly implementation process, it is SAP. For example, CIO reported that an attempted implementation of SAP ERP for the National Australia Bank was $200 million over budget when it cancelled the contract with Deloitte.

SaaS is typically sold on the basis of extremely quick setup (days or perhaps weeks rather than months or years), simple pay-as-you-use pricing, and no implementation issues when new versions are rolled out.

If SAP can pull off this transformation, it will be no mean achievement.