A battle brewing in the business applications market is boiling down to two sides: on-premises versus on-demand software.

Salesforce.com, an on-demand vendor in San Francisco that racked up $500 million in revenue in the third quarter of fiscal 2007, is looking to better delineate its integration strategy by announcing Nov. 27 ApexConnect, a family of integration tools designed to help users more easily integrate Salesforce.com applications with third-party software.

The concept with ApexConnect is that any Salesforce.com application will maintain connections with legacy software, Web services and other on-demand applications during and after an upgrade, given Salesforce.com’s multitenant architecture and the ApexConnect tools.

The ApexConnect suite includes about 25 AppExchange partner integration offerings that link Salesforce.com to common back-office applications, as well as custom integrations with the Apex APIs. Apex is Salesforce.com’s proprietary programming language; AppExchange is its integration and development platform. Apex Connect offers prebuilt integrations to SAP R/3 and Oracle 11i ERP (enterprise resource planning) applications, as well as to Microsoft Office and Outlook and IBM Lotus Notes.

Finally, ApexConnect offers something called ConnectOut, an on-demand outbound messaging API that lets Salesforce.com’s services talk to other applications.