May 5th 1999: Leading enterprise software vendor SAP confirmed application hosting as a key part of a new Internet-orientated business strategy, announced this week at its Sapphire 99 annual European user conference held in Nice, France.

As part of the launch of its mySAP.com strategy, the German software vendor announced initiatives with telcos, service providers and other partners to offer application hosting and outsourcing solutions based on its market-leading R/3 enterprise resource planning (ERP) software. It also revealed its own role as a hosting provider for the www.mySAP.com portal, providing electronic marketplace integration services between SAP user companies and the selling components of third-party business catalogue portals.

Co-chairman and CEO Dr Hasso Plattner said that SAP had been working with a number of major telecommunications companies, including AT&T;, British Telecom and Deutsche Telekom, to develop hosted solutions for smaller businesses. Other partners not yet ready to announce included a major Asian operator and other US providers, he added. "We have outsourcing over the 'Net as a strategy that starts now," he told delegates.

The telco offerings form part of a new class of preconfigured entry-level solutions based on R/3 which the vendor calls "Ready-to-Work". Targetting small businesses with annual revenues between 2m and 20m Euro (approximately $2m to $20m), they are an extension of the vendor's "Accelerated SAP" rapid, template-based implementation programme into the small company marketplace. "This is going below our current small and medium-size customer base," said Plattner. "We will settle slightly above the Intuits and the Peachtrees," he added, referring to popular entry-level accounting packages.

In addition to its telco partners, SAP is working with traditional outsourcing and channel partners to develop "Ready-to-Work" solutions. Some will be traditional onsite implementations, managed either by the customer or remotely by a service provider, while others will be fully hosted services.

Outsourcing partners in Germany are building on a long-standing tradition of shared computer centres which host accounting, tax and payroll computing for smaller businesses. The company will expand a pilot scheme that has been under way in Germany out to other European countries during this quarter. It is also developing an accreditation scheme for outsourcing partners, company officials told ASP News Review.

The need to cater for shared computing centres when SAP first designed R/3 means that the software readily supports multiple customer implementations, Plattner explained. "We always built the R/3 system for service bureaux. We can run multiple instances of the system with different flavours of implementation. On a few databases, we can run many customers. Ten thousand can run theoretically on one machine."

The mySAP.com launch comes at the end of SAP's 15-month enjoySAP programme to engineer a complete makeover to the look and feel of its products, which will be implemented in release 4.6 of SAP R/3, expected in the third quarter. The improvements in style and usability have been designed so R/3 appeals to web users. "We want to be - and will be - the best looking business application in the world," declared Plattner.

In addition to SAP's outsourcing announcements, the mySAP.com launch included various announcements relating to the 'webification' of R/3. They included the introduction of a personalised, role-based user interface and the launch of www.mySAP.com, a portal that will host directories, content and services which complement the R/3 environment.

As part of www.mySAP.com, SAP will host a marketplace enabled for electronic transactions between R/3-based purchasing systems and a variety of online services, catalogues and third-party marketplaces. Plattner said SAP will initially provide the service without charge while it builds up traffic and functionality.