SAP claims that through its Internet portal strategy, announced this week, it will be able to offer applications for the SME market, but is short on detail.
Hasso Plattner, SAP's co-chair said at the company's Sapphire 99 customer event in Nice that while the company has no intentions of competing in the single user market, it will scale down to around the 10 user market.
At this end of the market, SAP will provide pre-configured templates for specific industries. Henning Kagermann, SAP's co-chair added, "There will need to be a lot of specialisation built in, and perhaps the applications service providers we're seeing emerge will do this."
SAP is talking with several major telecoms companies about hosting the complete range of SAP products at their sites and delivering them to customers via the Internet. Possible partners are understood to include BT and Deutsche Telekom.
However, analysts have mixed feelings about this move. Brian Skiba, analyst with Lehman Brothers said: "They could certainly hurt the likes of Sage and Exact but we'll have to see."
At present, no details are being released about the pricing model although both Plattner and Kagermann believe SAP will be able to work within their current business model. Skiba said: "It'll probably be a rental thing at around $100 a seat - we've seen Baan do this - they've set the trend."
Plattner claimed SAP has not done any projections and would not be drawn on expected revenues from this source. "Our first job is to create the market and then we'll see about revenues," he said.
Commenting on the cost of the project, Plattner added, "We're being serious here. It's of the order of several hundred million Deutschmarks."
Mairi Johnson, equity research at Lehman Brothers said: "It's really hard to believe they don't know the numbers. They must think it's worthwhile but maybe they can't size the market at the moment."
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