German software giant SAP is teaming with
Hewlett-Packard (HP) to offer midmarket companies in the US a
hosted software offering that includes applications, maintenance,
services and support for a monthly fee.
The offering is aimed at giving midsized companies with limited
IT resources predictable software costs, said SAP spokesman Jim
Dever.
The service starts from $325 (£178) per user a month. Unlike
many other hosted offerings, customers end up owning the software
licences through an SAP financing programme which can span three
to five years, he said.
The lease-like offering will initially target vertical
industries such as food, fuel and high tech device manufacturers
with enterprise resource planning (ERP) software tailored toward
their needs, Dever said.
Customers access the applications through a web browser, while
HP hosts the software at its datacentres, and offers services such
as storage and recovery along with technical support.
Although the service is being rolled out exclusively in the US,
it may eventually be offered in other regions if successful, Dever
said.
SAP and HP have been long-time partners in providing hosted
software services, but the new offering marks an evolutionary step
for the providers, Dever said.
"SAP and HP are giving companies a single source for a
comprehensive ERP solution that lowers their risks and gives them a
predictable cost over time," he said.
While the hosted software model is not new for SAP, the offering
is interesting because it allows the company to transition
customers to new technology and generate fresh revenue, while at
the same time reducing the cost of supporting customers on older
platforms, said Neil Ward-Dutton, director of technology practices
at Ovum.
"This is an interesting approach to licensing for customers who
don't have new money to spend, or cannot spend it in big chunks,"
Ward-Dutton said.
Cost transparency is especially important for midmarket
companies with limited IT budgets, Dever said. SAP defines the
midmarket as companies with annual revenue under $1bn.
Scarlet Pruitt writes for IDG News Service