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After SAP's recent announcement that it would delay the release of Business ByDesign, the media seems to be proclaiming the demise of SAP as a SaaS provider a bit too prematurely, I think.

In an article on ZDNet UK, analysts are quoted as saying that SAP needs additional time to get its on-demand offering right and that it may not totally understand the market for on-demand software.

I tend to agree with the quote at the end that SAP should not be discounted in the SaaS market. Frankly, after years of covering SAP as a tech journalist, I have to say that the people running the company certainly don't strike me as being fools. I'm sure they know fully well that it makes sense to have some sort of on-demand offering and I would bet that they probably do have a fairly good understanding of their market and the needs of prospective customers.

On a purely speculative basis, I tend to wonder if they might have plans to acquire a rival rather than put too many more resources into developing a complete solution from the ground up. After all, as Phil Wainewright points out, SaaS rivals are already starting to play on SAP's playground, with the example of Workday's recent signing of a major contract with Flextronics for which it beat out SAP.

In addition, InformationWeek reports that SAP does have a Microsoft-esque strategy planned in which it will offer components of its software via SaaS for companies that wish to integrate them with on-premise software.

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