SAP delays web hosted software rollout

SME targeted SaaS product delayed over poor sales projections

SAPs Q1 results were disappointing

Business software company SAP has delayed the release of its long-awaited software as a service (SaaS) offering for SMEs by 12-18 months following a weak first quarter.

SAP's profits fell 22 per cent in the first quarter to €242m (£191m) from €310m (£245m) a year earlier, largely due to a slump in US sales. Revenues reached $2.46bn, up from $2.16bn for 2007's first quarter.

SAP feared its first foray into web-hosted software – known as Business ByDesign – would not generate the planned €650m (£508m) revenues and has halved planned investments in the product to between €75m (£38m) and €125m (£63m).

The company said its income had been affected by a significant increase in acquisition-related charges as a result of its €4.8bn (£3.8bn) acquisition of Business Objects.

SAP shares fell as much as 6.5 per cent as a result of the news.

Oracle, Software AG and Epicor also posted disappointing results last month.