SAP denies plan for CRM on demand

SAP is denying a report by Brent Thill, analyst at Prudential Financial, that says SAP is planning to launch a hosted CRM offering to compete directly with Salesforce.com. "We believe SAP is close to announcing a new hosted CRM application that is priced on a subscription basis — possibly as early as 27 April during the Sapphire '05 Copenhagen conference," Thill wrote.

However, SAP is denying the report, and in the process takes a swipe at the whole software on demand trend that many see as the future for business applications. In a press briefing, SAP CEO Henning Kagermann said,

When on-demand came up, we at SAP felt we should be careful...that on-demand is not the next locked-in strategy. With on-demand, the customer hands his destiny to someone else and then he finds out after two or three years he cannot get his destiny back.

SAP's Shai Agassi, head of SAP's product development and technology, piled on the criticism of software on-demand, and of Salesforce.com in particular. Quoted in the San Francisco Chronicle, he said,

I think some of it is over-hyped. You have to put it in perspective. Salesforce.com in Q4 of last year added something like 19,000 users to their customer base. We added more than one million users....There are some people who make big noise. Talk is cheap.

SAP's reaction strikes me as a bit overly dismissive. At the risk of betraying my age, it reminds me of the attitude 25 years ago of mainframe programmers toward personal computers.

If I were Salesforce.com right now, I would be breathing a sigh of relief that SAP is not planning to launch a hosted on-demand CRM service.

Related posts
Software on demand: attacking the cost structure of business systems