Feb 12th 1999: SAP America and EDS announced Tuesday (Feb 9th) an alliance to offer SAP applications as an outsourced service to smaller businesses.

SAP has created a packaged solution, called the "Accelerated Enterprise", which is the first "Accelerated Solutions" offering available from its alliance with top-tier IT services provider EDS. The package comprises financials, manufacturing, and sales and distribution modules from its R/3 suite of enterprise business applications. SAP will later on add options for human resources, advanced planning, and its business information warehouse.

Targetted at enterprises with annual revenues up to $200m, the service is charged on a per user, per month basis, although customers must commit to a three-year contract. Implementation is performed by SAP-certified partners and billed directly as a start-up cost rather than bundled into the packaged price. The SAP-EDS alliance will also offer fixed-bid implementations, but this is not its primary focus.

The application outsourcing service will be marketed through SAP's certified business solution providers as well as sold directly by SAP and EDS. EDS will manage and support the service and has introduced a suite of consulting, infrastructure and system management services called KeySource as a branded service platform for its application outsourcing activities. Although the SAP-EDS alliance is the first strategic move into subscription-based computing for the two companies, both expect to go on to enter similar alliances with other partners in due course.

The service just announced was formulated in November last year and went into pilot trial with Sebastiani Vineyards, a Califonian winery, in December. The customer is now acting as a reference site for the service.

Although the primary target is smaller enterprises, the service will also be available to companies with revenues above the $200m watermark, an EDS spokesperson confirmed to ASP News Review. These customers will deal direct with SAP rather than through a channel partner.

In a press statement, Eric Rubino, senior vice president at SAP America, said that packaging its software for outsourcing "makes an enterprise applications solution simpler to acquire and more cost effective. It also provides companies with predictable costs and better forecasting."

The scheme is currently available only in North America and there are no immediate plans to extend it elsewhere.