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SAP to Make Online Software Push

June 10, 2009
by Ben Worthen
Reporter, The Wall Street Journal

Ben Worthen

Software maker SAP (SAP) is about to make its second foray into the world of online software.

In September 2007, SAP unveiled an online version of its management software aimed at small businesses. The product languished, with the company’s co-CEOs last year saying that they wouldn’t sell it because it didn’t make any money.

SAP plans to unveil a new online software strategy later this week. This time the target audience is the large businesses that make up SAP’s core customers, says John Wookey, the SAP exec in charge of the project. Wookey has spent the last six months crafting the company’s online-software strategy.

SAP’s software, which businesses use for tasks like balancing the general ledger and tracking inventory, is installed on servers that businesses buy and operate themselves. Businesses pay a hefty upfront fee for it and ongoing payments for product support. Online software is accessed over the Internet through a Web browser. It’s run on servers operated by the vendor, and customers typically pay a monthly subscription fee. Online software is commonly viewed as a threat to companies that sell traditional software because it tends to be less expensive for customers and less profitable for sellers.

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