SAP launches Web-based software for smaller businesses

09/20/07 - newratings.com

LONDON, September 20 (newratings.com) - SAP AG (SAP), the largest business-management software maker, Wednesday unveiled a line of Web-based business-management software, shifting its strategy to tap smaller customers.

The Walldorf, Germany-based company said the subscription-based software, called Business ByDesign, would be initially available to select customers in Germany and the US. SAP added that the software would be later made available in the UK, France and China, after which it will target the Australian, Indian, Italian, Dutch, Spanish, South African, Canadian and Mexican markets in 2008. The new product offering is a crucial plank in SAP's strategy to more than double the company’s customer base to 100,000 and generate $1 billion in sales by 2010. With the launch of the software, the company would be competing directly with Salesforce.com, the biggest seller of online customer-management software, and NetSuite Inc.

SAP’s chief executive Henning Kagermann said the launch of the product marked the beginning of a new era for the company. SAP has budgeted up to €400 million for the marketing and ramping up of Business ByDesign by the end of next year and had projected in January that the spending would slash the company's profit margins by as much as 1.3% in 2007.