The service is priced at US$75 per user a month and requires a full-year payment. However, the customer can opt out at any time and get a refund for unused months.

Aaron Nichols, general manager of IT at Ottawa-based Canada Post Corp., an SAP ERP and CRM user, predicts that the hosted service will likely be reliable but says that he's not interested in using it.

"For a company of our size, with 10,000-plus full-time users, hosted solutions are not on the radar screen. I tend to view hosted solutions as more applicable to small and medium businesses," he said.

The hosted service appears to be aimed at SAP's installed base, which should help the firm stanch efforts by competitors to poach its customers, said Joshua Greenbaum, analyst at Enterprise Applications Consulting in Berkeley, Calif.

He noted that SAP is facing strong efforts by vendors of hosted CRM systems, including Oracle Corp., to replace SAP's CRM software. "SAP needs to be defensive about that," said Greenbaum.