December 8, 2009 / 8:29 PM / 10 years ago

UPDATE 1-SAP to launch Salesforce.com rival in mid-2010

* Plans new web-based programs for sales management

* Exec says expects it to be profitable by end of 2010

* Will also take on Concur in expense mgmt from mid 2010

BOSTON, Dec 8 (Reuters) - Software giant SAP AG (SAPG.DE) plans to launch web-based sales management software in the middle of next year that will compete head-to-head with programs from fast-growing rival Salesforce.com Inc (CRM.N).

SAP Executive Vice President John Wookey said that the software is being built from scratch so it will be well-suited for delivery over the Web.

“These products should be profitable by the end of next year,” Wookey said in an interview on the sidelines of a customer conference held in Boston by SAP, the world’s biggest maker of business management software.

Salesforce has poached SAP customers in recent years with so-called software-as-a-service, or SaaS, offerings that corporate users can only access over the Internet. They are popular because initial costs are low and it is fast for companies to get the new programs up and running.

Salesforce.com is the largest provider of SaaS programs, which have taken off over the past few years as companies have embraced the concept of “cloud computing,” which includes running their software from remote, hosted data centers.

SAP will host software for many customers on a single computer, an approach that Salesforce has championed since it was founded over a decade ago. That “multi-tenant” model has taken off because it makes it far less expensive for SaaS software makers to deliver their programs.

Wookey said that it will take a while for SAP to position itself as a leader in SaaS. It will initially target its sales efforts at its existing customers, who use SAP software that businesses must run on computers in their own data centers.

“We’re going to have to build up our customer brand and our own credibility. Then we’ll start to get people to take us more seriously,” he said.

Oracle Corp ORCL.O also sells web-based sales management software that competes with programs from Salesforce.com.

Wookey also said that SAP will also start offering web-based programs for managing expenses in the middle of next year that will compete with software from Concur Technologies Inc CNQR.O. (Reporting by Jim Finkle; Editing by Tim Dobbyn)

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