SAP's hosted on-demand CRM disappoints pundits

Long awaited, but quickly criticised

SAP’s move to hosted services may have been long awaited but some experts are underwhelmed by the belated debut.

Earlier this month the German enterprise applications giant released Sales On-Demand, a hosted sales management module. The company said this would be followed soon by lead-management and forecasting modules. Later, SAP plans to add a broader service called CRM On-Demand with marketing campaign management and hosted call-centre capabilities.

As with hosted applications sector leader Salesforce.com, the services will be upgraded on a quart- erly basis and charged per-user. IBM will provide hosting capabilities and integration services.

One analyst said SAP may have timed its move to attract customers who face uncertainties following Siebel being acquired by Oracle, and Salesforce suffering outages.

“Frankly, this service is being launched far too early with an inadequate set of capabilities,” said Ovum’s David Bradshaw. “We can only think that someone on high in SAP declared that the company had to be ready to launch at a specific date and it would go with whatever it had at that time.”

Although Bradshaw described the launch as “messy and disappointing”, he supported SAP’s decision to offer an on-demand service.

SAP’s version of software as a service is based on what it calls an “isolated tenancy” model that offers customers the ability to run applications on premises as well as in hosted form on dedicated servers. Some watchers said this approach is less scalable than the multi-tenancy model used by most software hosts.

However, SAP also has some strengths that could make its hosted offerings appealing. The services share the MySAP CRM data model, for example, and many current SAP customers will be attracted to having a fast-deployment option for subsidiary operations.

AMR Research analyst Robert Bois advised, “SAP customers evaluating a departmental or quick-ramp SFA [salesforce automation] project should take a look at SAP CRM On-Demand, but remember that only part of the full SFA is addressed in this first release.”

A study carried out last year by AMR Research found that 31 percent of large enterprises planned to purchase on-demand sales services within 12 months.