SAP buys Coghead to expand SaaS portfolio

But SAP will only use the new technology internally and has no plans to continue running Coghead solutions commercially.

SAP said it plans to use the acquired platform and people to drive its software-as-a-service (SaaS) development, a strategy that remains relatively underdeveloped by the firm.

In terms of SaaS offerings for large businesses, SAP has only launched CRM on demand, although it talked last winter about developing on-demand components for integration with all its ERP software.

SAP has also offered mid-size businesses an ERP on-demand offering called Business ByDesign since 2007, which is on a road map to reach 10,000 customers and generate US$1bn in revenue by 2010.

Although reports on Thursday said the software was struggling with technical problems, an SAP spokeswoman said this was “simply wrong” and that a new update would be given to the product this year.

The spokeswoman added, “SAP plans to use the Coghead IP [intellectual property] as an internal development tool to increase the speed and efficiency in which SAP brings SaaS applications to market.”

But following the demise of Coghead as an independent firm, many of its customers will be left stranded, leaving competitors such as Caspio and Intuit to benefit.

"We are stepping in quickly to help those who had based their business applications on Coghead to quickly migrate their data and transition their applications to Caspio Bridge,” said Frank Zamani, founder and chief executive of Caspio.

“We are ready and capable to help them minimise disruption."