SAP buys its way into on-demand SRM

Applications stalwart scoops up Frictionless Commerce

SAP AG is buying its way into providing on-demand supplier relationship management (SRM) software through the planned all-cash purchase of Frictionless Commerce Inc. announced Wednesday.

SAP didn't disclose any financial details about the transaction, which it announced at its U.S. Sapphire user conference in Orlando. The company expects to close the deal in July.

The Frictionless software already integrates with mySAP SRM, allowing customers to migrate between on-demand and on-premise SRM, SAP executives said.

The news comes the same day that SAP announced its first hybrid CRM (customer relationship management) software with the release of SAP CRM 2006s suite. The idea is that users can move between hosted CRM and on-premise CRM as their needs change, according to Shai Agassi, president of SAP's product and technology group,

The acquisition is another in SAP's ongoing strategy to avoid the multibillion dollar purchases that rival Oracle Corp. has made. Instead, SAP has concentrated on filling its software portfolio gaps by buying smaller players in specific market areas. SAP completed another such buy, closing the acquisition of compliance software company Virsa Systems Inc. Wednesday. SAP announced plans to acquire Virsa last month.

Frictionless is privately held and has headquarters in Cambridge, Massachusetts. It employs about 70 staff and also has an office in London. SAP expects to maintain both offices going forward. Frictionless customers include Aetna, Bristol-Myers Squibb, Florida Power & Light, Philip Morris USA, Prudential, Revlon and Wachovia.