Following the Microsoft announcement a couple of months ago about Windows Live and Office Live services, today SAP had a press conference to announce their move into Software as a Service (SaaS).

For them, this action is a response to customer demand. For everyone else, it’s a great validation for all on demand providers today serving large enterprises!

Targeting large enterprises and the upper mid-market, we think that it could be a strategic hit at salesforce.com for targeting the SAP users in the upper market. This CRM solution will start at $75 per user per month. And SAP is a bit shy of offering a “hybrid” solution, or the possibility to migrate from the on demand to on premise option.

Their interesting model differentiation is called isolated tenancy versus multi-tenancy.
This approach is another sign that the solution is mainly targeted at very large organizations. The ease of implementation with the isolated tenancy model is there. But the cost savings could not be.

Anyhow, this announcement is a major move in the enterprise software market and here at Taleo we see this as good news. It provides further validation that our model is what customers are looking for.