SAP AG, the German ERP vendor, has broken into the SME market in a deal with British Telecommunications Plc who will offer scaled-down modules of R/3 as an application service provider.
The new service called BusinessManager is targeted at companies with between 50 and 500 employees and will offer a basic R/3 financial package at prices starting at 50 pounds ($81.5) per months for each user. While R/3 is notoriously difficult to implement, BT claims that the system has been designed for easy set-up, reducing implementation times from nine months to six weeks.
This is the first time that SAP has offered R/3 to an applications hosting operation and if it proves successful the company is likely to roll out the operation in other parts of the world. In common with other big ERP companies, saturation at the top end of the market and a slow-down in demand as companies concentrate their spending on Y2K issues, has left SAP looking for opportunities among smaller companies.
BT says that smaller companies will not have to buy in IT skills because it is all done for them, the technology risk is eliminated and applications will grow with each company. Software and data is held at BTÆs data center and customers need only a PC and a dial-up connection to access the service.
BT is joining a rush of companies setting up as application service providers and Forrester Research has estimated that revenues in the sector will rise from around $90m in 1998 to $6.3bn in 2001.
