SAP AG has announced the release of a line of business management programs to be delivered over the Web, becoming the first major software company to make a big bet on software as a service.
Until now, SAP and other big business software makers like Oracle and Microsoft have focused on developing programs that sit on customers' computers.
SAP is the first of its kind to enter the Web-based software market, known as on-demand software or software as a service, which has been pioneered by much smaller competitors including Salesforce.com Inc and NetSuite Inc.
After spending about two years developing the new software for medium-sized companies, under code-name "A1S," SAP will give the public its first glimpse of the product at an event in New York, and provide pricing and marketing plans.
"A1S takes SAP much closer to a more purist model of software as a service than it has previously attempted, and is likely to become a very significant part of the SAP portfolio in the years ahead," Ovum researcher David Mitchell wrote in a recent note.
He said SAP, Oracle and Microsoft had previously taken a wider approach to on-demand software, mixing programs that sit on personal computers with programs residing on Web servers.
SAP is the world's top maker of business software, which helps companies manage accounting, inventory control, shipping, sales and marketing. It earns the bulk of revenue from licenses on software installed on its customers' premises.
