Those concerns are lessening, however, and hosted services for two areas of ERP, customer relationship management and human resources management, will soon be "mainstream," Lykkegaard said. IDC expects revenue from hosted applications services to increase by a compound annual rate of 32 percent over the next five years, he said.
Hosted complete ERP systems have been slower to develop because regulatory and end-user requirements vary so much between individual customers and countries.
SAP showed Wednesday how companies will be able to try out Business ByDesign on the Web before they make a purchase by selecting their industry and loading some of their own data for a "live" test. They choose an industry and the types of business processes they want to include in the test, and the software offers different user interfaces based on their choices.
While the product was built from scratch, SAP said the system is based on its Netweaver middleware and an SOA design.
Customers in Europe appear to pay more for the service, at €133 per user per month, or $184 at current exchange rates, according to a FAQ on SAP's Web site.
SAP Deputy CEO Leo Apotheker said their will be some "upsell potential" for SAP by offering additional packages for warehouse management, manufacturing management and services management.
SAP is positioning the service between its software products SAP Business One, for companies with up to 100 employees, and SAP All in One, for midsize companies with up to 2,500 employees. It will not offer a way for existing customers to migrate from its software to the hosted service, saying the service is "not intended to replace any other SAP solution."
While the minimum subscription is for 25 users, there is no maximum, SAP said in its FAQ. So although the service is aimed at customers with 100 to 500 employees, it may allow some bigger midsized companies to sign up for it.
This story was updated on September 19, 2007
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