The first product available is SAP Sales, which provides core salesforce automation features for managing customers, contacts and sales pipelines. SAP plans to upgrade the software every 90 days, and will release subscription-based products for marketing and services later this year.

SAP executives positioned SAP Sales and future on-demand CRM products as potentially temporary solutions for companies that want to get started quickly with CRM via a hosted model and migrate to an on-premises deployment as their needs grow. Shai Agassi, president of SAP's product and technology group, described "an on-demand solution that can over time grow into an on-premise solution."

Because SAP's on-premise and on-demand products share a common architecture, data model and user interface, a company that starts with the hosted version can buy licenses and move the software in-house when the business is ready for more robust CRM capabilities, Agassi said during SAP's launch event last week.

SAP is late to the software-as-a-service world compared to its traditional competition for enterprise business applications. Oracle already offers on-premise and hosted CRM products -- as does the now Oracle-owned Siebel Systems. In addition, Salesforce.com, NetSuite and RightNow Technologies are among vendors with hosted CRM products.

Analysts offered mixed reviews of SAP's first foray into the hosted CRM world.