The intersection between HR strategy and HR technology

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SAP Offers On-Demand

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Is Software as Service in the realm of possibility for SAP? Probably not. Even though I’ve written about SAP in a vanilla, hosted model, I don’t think much of this approach. To be totally honest, if you are complex and need a vanilla implementation, SAP is probably not the product for you. True, there’s some prestige that might (doubtful, but possible) go with having an SAP installation, but it’s not worth it if it means vanilla SAP.

SAP is a complex application for complex organizations. It’s core functionality for basic HR is pretty good, but to really get the value out of the product, expect to spend time and money implementing the non-core modules. This means that you’ll have a fully integrated ERP philosophy (as opposed to a point solution – figure out the integration later – strategy). If you want vanilla, there’s much better and cheaper applications that should fit the bill.

Then comes this article in Computerworld about SAP offering hosted solutions.

SAP will not “cannibalise” its enterprise software business to support the burgeoning software-as-a-service (SaaS) trend, but it will branch out beyond hosted CRM (customer relationship management), to offer other applications on-demand, chief executive officer Henning Kagermann says.

However, SAP will continue to grow its on-demand software model as necessary, to keep up with competitors such as Oracle and Microsoft. “We’ll never substitute our core business, but [on-demand] will be an additional revenue stream,” Kagermann says. ((Montalbano, Elizabeth, April 24, 2006. “SAP To Expand On Demand Offerings,” Computerworld. Retrieved from on April 28, 2006.))

It almost makes it sound like hosting and ASP is a new thing. Perhaps SAP hasn’t been hosting it’s own products (I don’t know) but the concept of hosting SAP is nothing new. Fact of the matter is that “on demand” SAP is probably not very on-demand. When I think of on demand, more and more often I’m thinking SaaS with it’s multi-tenant architechture (more than one client running off of a single installation). SAP does not support multi-tenet installation and in order to do so, one must assume the client base is homogenous enough to fit into the configuration allowances the product offers.
Bottom line? I think it’s all marketing spin.

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