SAP marries CRM on-premise to CRM on-demand

The new hybrid option will allow customers to start quickly with the hosted option and gradually move to on-premise with the same user interface.

ORLANDO, FLA. -- SAP today trumpeted the benefits of a hybrid approach to CRM deployment with its forthcoming release of SAP CRM 2006s, bringing together SAP Sales OnDemand, released in February, and its on-premise mySAP CRM.

SAP CRM 2006s will bring the popular user interface from its on-demand application on-premise.

"When SAP first released OnDemand, the value proposition was the same data model [between on-premise and on-demand]," said Rob Bois, research director with Boston-based AMR Research Inc. "With 2006s, not only is the data model the same, but the user interface is the same. The user reaction from the on-demand interface was so good that they're following through with that."

SAP CRM 2006s will be released this summer and will be Web service-enabled for ease of integration with SAP and non-SAP back-end systems. Customers can install mySAP CRM in complex, on-premise deployments and use the on-demand version for smaller deployments that require faster implementation times, according to executives at Sapphire, SAP's annual conference, being held here this week. The hybrid option is designed to appeal to SAP's existing customer base. In fact, SAP has acknowledged some barriers to deployment with its current CRM systems, which SAP CRM 2006s will most likely address.

"They're not going to sell this to non-SAP customers," Bois said.

That's a fact acknowledged by Bob Stutz, general manager of CRM for SAP. Although much of the call for on-demand has come from the small and midsized business (SMB) market, SAP is not competing with the vendors which target that market segment, Stutz said.

"We're not trying to compete with Salesforce.com," Stutz said. "We have a pretty large customer base. We don't need to go after that small base."

Indeed, one enterprise customer recently purchased a smaller firm and is using SAP Sales OnDemand to move the salesforce to SAP in the short term while it absorbs the new staff. This is just the sort of customer that will benefit from the hybrid model, according to Stutz. Nevertheless, SAP has not ruled out the midmarket entirely.

"We are working on trying to push down further into the midmarket and larger SMB space," Stutz said. "I do believe we will get there."

Meanwhile, the on-demand application provides SAP with an alternative for its customers that have turned to competitors such as San Francisco-based Salesforce.com for their simple, quick deployment CRM needs, Bois said. Moreover, with the new user interface, companies won't face the difficulty of training salespeople on a new tool when they switch to on-premise, as they would if they deployed Salesforce.com.

The notion of a hybrid approach isn't new to CRM. Siebel Systems coined the term when it  first ventured into the on-demand CRM market . And just as Siebel did then, SAP now stands at odds with many of the on-demand CRM vendors that forged the way with Software as a Service (SaaS) and remain committed to "pure" on-demand. In fact, Stutz said, on-demand is the wrong way to go in some cases.

"I would never recommend to a customer that they run a complex CRM implementation on-demand unless it's inside their firewall," Stutz said. "When it comes to the really complex processes, you won't want to do that on-demand. There is an element of control you want to keep over your business."

For Rodney Pannell, SAP basis and finance development team lead at Cavalier Homes Inc., an Alabama-based home builder and seller, and insurance and mortgage provider, hybrid CRM provides just what he and his company were waiting for.

"We want to get CRM up and running quickly," Pannell said.

Cavalier Homes is already an SAP shop, and the data model and user interface provide the opportunity to move the system on-premise when the organization is ready, Pannell said. Cavalier already made a commitment to SAP and didn't want to launch a separate on-demand solution.

SAP CRM 2006s will also include vertical enhancements. It will feature order and contract management for the telecommunications industry, leasing and account origin for financial services, grants management and social service capabilities for the public sector, and contract life-cycle management for the life sciences. It will also feature cross-industry advances in call center technology, loyalty management, pipeline performance management, case management, and high-volume campaign management.

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