SAP revealed more details of its A1S strategy for serving mid-market companies through a suite of on-demand applications at its Sapphire user conference in Atlanta this week.

The German giant disclosed that the service would be pitched between the All-In-One and Business One services, and would be aimed at companies with between 50 and 500 staff. A1S will be a hosted, on-demand service with users able to select features and elements that are applicable to their roles and industries. SAP is continuing to validate the service with about 150 companies and volume availability is expected in early 2008.

SAP chief executive Henning Kagermann described A1S as fitting into the company’s strategy to be “fast, easy, low-risk” and insisted that the target audience is distinct from All-In-One or Business One.

A1S is aimed at the “entirely different needs of customers who are more in the low end [and] who say … we don’t need modifications or a lot of implementation services, we want you to do it for us,” Kagermann said.

However, some watchers were disappointed with the lack of detail from SAP and others doubted whether the firm’s culture and sophisticated programs would fit with the on-demand model.

“The historical problem SAP has always run into in the mid-market is that someone has to go out to sell,” said Dale Vile of analyst firm Freeform Dynamics. “The economics of the business mean you have to keep cost-of-sale to a minimum and I’m sceptical about self-implementation outside of the low-end. It’s quite a romantic idea.”

Also at Sapphire, SAP extended its roadmap for integration with Microsoft Office via the Duet relationship that links Microsoft’s familiar desktop environment with SAP’s back-office applications. SAP said Duet 2.0 is scheduled for late 2008 while version 3.0 would follow shortly after the next versions of Office and SAP’s Business Suite.

However, this schedule is more protracted than SAP might have liked. In an interview with IT Week in November 2006, director of solutions marketing Prashanth Shetty declined to disclose an official schedule but said SAP was aiming for a late-2007 release for the 2.0 version.

Plans for the 2.0 and 3.0 versions include support for sales and supply-chain activities and the ability to run SAP CRM without leaving Office. Collaborative features will also be added via integration with Microsoft SharePoint, including business scenario templates.

SAP said Duet had already gleaned over 250 customers and 400,000 licences. Together with HP, SAP and Microsoft are also releasing an appliance, based on an HP Proliant server and pre-installed with Duet code, which is intended to speed up deployment.

As well as detailing plans for Duet, SAP also provided an update on its NetWeaver platform with plans to incorporate Ajax-based rich client capabilities, fast service-bus capabilities and governance through the NetWeaver Enterprise Services Repository and UDDI 3.0 registry.