If SAP does jump into the on-demand CRM market, it will instantly change the balance of power in the industry. Salesforce has grown rapidly in recent years–it reported just more than $176 million in revenue for fiscal 2005–and it has become nearly synonymous with on-demand business applications.
SAP’s official comment is that it continues to evaluate market opportunities but has no plans to introduce new hosted CRM applications anytime soon. At the company’s Sapphire customer conference in Boston in May, Bill McDermott, the chief executive of SAP America, attempted to downplay the need for SAP to launch a new product.
“Hosted is really only relevant in the small-business space, and Salesforce isn’t delivering the same sort of integrated products we already offer,” McDermott said. “The question for Salesforce is, when these newer CRM users they have attracted need more capabilities, will they move to SAP?”
Though SAP already offers its customers the option of having their CRM applications hosted and managed off-site, the company has yet to introduce a ground-up rewrite of its enterprise software applications specifically for hosted use.