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SAP jumped on the software-as-a-service
bandwagon today, announcing a new program that allows channel partners to offer
its midmarket industry-specific software suite on a subscription basis.

Partners participating in the SAP
Business All-in-One fast-start program can now be certified by SAP
to provide application management and hosting services for SAP
Business All-in-One solutions. SAP Business
All-in-One is SAP’s suite of vertical
applications aimed at midsize customers and one of its primary indirect channel
vehicles. These business-focused applications come preconfigured for specific

The subscription program is available to customers on a two-, three- or
four-year fixed-rate contract basis. To date, four partners have become
eligible subscription providers: Ciber, intelligence, Optimal Solutions and
RunE2E. In a statement, SAP officials said
this option will spur sales among customers that had, in the recession, put a
lid on additional capital expenditures, including hardware and on-premises software

"In these tough economic times, it’s definitely not lack of need or
desire slowing down SAP implementations
among midsize companies," said Elliott Garofalo, senior vice president of
the SME Practice at Optimal Solutions, in Irving,
Texas. “The problem is closely guarded
capital expenditures.”

Optimal Solutions has developed a SaaS program called FlexChoice Advantage
that rolls what would be the expenses associated with software licensing,
hardware purchases, implementation and management of SAP
Business All-in-One into a monthly fixed rate for customers. Optimal customizes
the software to the end user’s specifications, then hosts the applications

SAP, with its direct-sales enterprise
heritage, has struggled to crack into smaller customer segments, where it has
relied on channel partners. The SaaS alternative could position the company to
better compete against other cloud-based applications vendors that offer CRM
and ERP, such as SugarCRM, and Microsoft.