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Is on-demand transaction software ready for prime time?

Late to the Dance

Top ERP vendors trot out hosted products — finally.

Although upstart Salesforce.com has found a ready audience for hosted customer-relationship management (CRM) applications, marquee enterprise software vendors have been slow to embrace on-demand software. Their thinking? Customers may be willing to hand over niche applications to third-party providers, but they’ll never outsource core business systems.

The unbridled success of Netsuite 10.0 and its bundled ERP product has shot that logic all to hell. Not surprisingly, many of the big enterprise software players have begun hurriedly rolling out on-demand ERP products. Oracle, which jumped into hosted programs fairly early, is flogging Oracle On Demand, a software-as-service offering. According to Juergen Rottler, vice president of Oracle Support and Oracle On Demand, the setup allows customers to mix and match traditional on-site programs with hosted tools.

Meanwhile, IBM has teamed with San Jose, California-based Intacct Corp. to deliver enterprise resource software to customers via the Web. Intacct’s ERP On Demand product supports an array of functions, including general ledger, cash management, and payroll functions. “The partnership [with IBM] allows us to provide a Fortune 50-level data center to our customers,” says Robert Jurkowski, CEO at Intacct, which was one of the first ERP vendors to embrace the Web delivery model.

About the last to do so: industry giant SAP. After much hemming and hawing, management at SAP is finally expected to roll out a subscription-based CRM service sometime this year. And the ERP giant does market a hosted version of MySAP, which is aimed at small businesses. But MySAP is not a true subscription model: users purchase the software license up front. “We want to help customers solve business problems,” notes Gary Fromer, senior vice president of SAP Managed Services (SAP America). “But we don’t have a unique hosted solution.” Not yet, anyway. — J.E.

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