SAP, the giant German company known for its ERP software, has been preparing a new software-as-a-service (SaaS) offering, which will likely be available sometime next year. Nicholas Carr notes that the new product, known as A1S, will have infrastructure implications:
The shift toward providing software over the Net poses some big challenges for the German giant. First, it's going to have to get into the data center business - and that will mean substantial new capital investments. As Business Week reports: "The investment will shave its expected 2007 operating margin by 1% to 2%, to around 27% of sales. That's slightly lower than in 2006. 'You have a lot of costs up front,' says (SAP CEO Henning) Kagermann. 'It's a different model.'"