SAP America Inc. and Hewlett-Packard Co. are collaborating on a hosted enterprise resource planning software service for midsize companies in specific vertical markets.
The hosted service will allow midsize companies to gain access to SAP ERP applications, such as human resources management, finance and sales applications, at a minimum rate of $325 per month, according to SAP spokesperson Jim Dever.
The service will give midsize companies access to SAP applications that "cover everything from supply ordering to warehousing and logistics to their core financial management applications," Dever said.
The hosted service allows the two companies "to offer consolidated software services and support for midmarket companies in a way that lowers the cost and the risk for midsize companies," he said.
Customers dont have to incur the full expense as well as the time and effort required to deploy the applications inside their own IT departments. Instead, customers use Web browsers to access the applications that HP hosts in its Palo Alto, Calif., data center, Dever explained.
"Most of the midmarket companies dont have huge IT staffs [or] the ability or the resources" to deploy full-scale ERP in-house, Dever said. "We are giving them preconfigured software at best prices," he said.
However, Dever stressed that the joint offering is "not a subscription service offering as some people have suggested." Customers will pay for and own application licenses and keep control of their own corporate data, he said, rather than give control of the application and data to the hosting service.
The idea is to give midsize customers a low cost of entry. Customers pay a monthly rate through the SAP Financing Program to cover the cost of the software license, and maintenance and implementation fees. HP provides the IT infrastructure services, including data center operations, hosting, storage-on-demand, business recovery, security and managed Web application access.
SAP is going to offer the hosted ERP applications initially for four industry verticals: oil and gas fuel distribution, consumer products and food, high technology manufacturing, and technical service providers, Dever said. SAP and HP will support additional industry verticals as the hosted service grows, he said.
The hosted program will be important to midsize companies that "have got to compete against larger companies that are leaders in the industry" or that are suppliers and contractors to industry-leading companies, such as Wal-Mart Stores Inc., Boeing Co. or General Motors Corp.
The hosted service will also give customers a way to gradually expand their ERP application set as their business grows, Dever said.
The SAP-HP service allows the partners to go after midsized companies that might be talking to companies such as Salesforce.com, Siebel Systems Inc. and RightNow Technologies Inc.