SAP’s Half Hearted On-Demand Foray

Yet another defensive move by an enterprise software vendor – this time SAP, after a long wait & period of indecision, embraces on demand as a niche offering. While earlier predictions of end of traditional software are wide off the mark, there is a certain appeal in some sections that some businesses will hand off the task of managing their own server computers and software applications to companies like his that deliver software on demand over the Internet. SAP’s street pricing is said to be $75 per month (salesforece.com starts at 65$/month).SAP calls the new application a "hybrid." It's designed to work as a service or on a customer's own computers. Some SAP belief’s are insightful:

- It does not think that this is the end of software, but it's just another way of deploying it.
- It believes most large corporations that buy CRM as a service will use it only temporarily and eventually move the applications on-premises.

It has to be acknowledged as one user points out that there's different DNA for a traditional software company and on-demand software company – salesforce.com at the field level as one can see works with the passion of a startup and Marc Benioff never misses opportunities to reinforce its image despite recurring issues centered around outages. Oracle, Siebel, now SAP – somehow all these put together do not match the mindshare arithmetic that pureplay on-demand players command. SAP/Oracle’s foray into ondemand is not fired by Ray Lane's innovate-dominate paradigm or as recognition of changing framework but purely as a defensive mechanism. It’s the same as hedging bets vs survival & growth mantra.