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SAP is now taking a page out of the playbooks of Salesforce and NetSuite, a company majority owned by Oracle Chief Executive Larry Ellison that filed in July to go public.
It will also be competing with software from Workday Inc, a privately held company started in March 2005 by PeopleSoft founder Dave Duffield that offers Web-based accounting and human-resources software. Oracle acquired PeopleSoft in January 2005 for $10 billion.
Fewer than 100 companies have tried the new SAP product as part of the early testing process. SAP has said it would spend about $500 million on A1S through the end of next year.
"There's a pretty good chance they can execute well here," said Forrester Research analyst Paul Hamerman.
People familiar with the matter said the software would be rolled out gradually in the United States, Germany, Britain and France. It should be widely available in those countries in the first quarter of 2008 and SAP hopes to have "thousands" of customers by early 2009, they said.
"This isn't for everyone, but I think there is a market for it," Hamerman said.
SAP has been surprised by leaps in the capabilities of Web-delivered services evidenced by the likes of Google Inc, analysts said.
Google provides e-mail, word processing, spreadsheets and presentation software through a growing portfolio of products that it calls Google Apps. SAP felt it had little choice but to enter the market in earnest, analysts said.
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