SAP is demonstrating a beta version of its new hosted midmarket application to select groups at the CeBIT trade show in Hanover, Germany.

The application, known internally as A1S, is currently being tested by around 150 customers, said SAP CEO Henning Kagermann following a demonstration of the software Thursday.

No firm date has been set for a commercial launch, but general availability is expected in the second half of this year, according to Kagermann.

"This is a completely new model for us," Kagermann said. "We have to ensure that not only the product but also the service are tops."

A1S will target midmarket customers who seek an inexpensive, easy-to-deploy, low-risk suite of business applications, including ERP, CRM, and SCM. The hosted application will be available as a monthly subscription. It will give smaller, cost-sensitive companies the flexibility to set up and test the software on their own before deciding to make a purchase, using a "try, run, and adapt" model.

Users who see the browser-based application for the first time will notice an interface that blends in with "the Windows environment," Kagermann said.

"A huge effort" went into designing a simple, intuitive, and uniform user interface, said SAP board member Peter Zencke, who heads the A1S product development team.

A "help" icon appears on every screen. When clicked, users are shown a list of options, including "frequently asked questions" or a video link if they want to see how to perform a task.

For technical problems, users can click another icon and send an e-mail to the SAP service team, which will be able to provide support.

The application conducts a dialog with users, asking them what type of business tasks they need to perform and how they would like to manage them, offering examples in simple language.

Some businesses will be able to set up A1S on their own, others my need some initial coaching, according to Kagermann.

"We expect a new breed of consultant to help some businesses get started -- but only to get started," Kagermann said. "Once businesses have used the application, they'll get the hang of it pretty quickly."

Kagermann expects even some senior managers of companies, who typically don't spend much time with software issues, to show an interest and master many functions on their own.

Traditionally, the software industry has developed applications and businesses have had to adapt their processes, according to Kagermann. "Now with A1S, users define their software requirements," he said.

The new hosted midmarket application, which runs over the NetWeaver middleware platform, is designed to integrate with mySAP ERP business suite. Kagermann expects subsidiaries of large enterprises to be interested in the product.

Could users of SAP's All-in-One licensed midmarket offering, which is a slimmed down version of mySAP ERP, be attracted to the new hosted application to save money?

"Let me make a comparison to the car industry," Kagermann said. "You can buy a basic car that transports you from point A to point B. But if you want to have other special features, you pay for them. That's the difference between All-in-One and A1S."