Enterprise resource planning (ERP) provider Lawson Software plans to cut off SAP at the pass with the European availability of its first on-demand offering early next year.

Mid-market specialist Lawson said it plans to begin offering a hosted service, starting with human capital management (HCM) and later other applications if there is demand. The HCM service is already available in the US.

SAP earlier this month said that it will release its A1S hosted suite aimed at small and mid-sized businesses in September, together with a formal name for the service and names of live customer deployments.

“We’ve never done a launch like this in our history,” said Henning Kagermann, chief executive of the enterprise applications giant. “You can’t compare it to the new CRM or [programs for] governance risk compliance. It’s a new business with a new product, new technology … an entirely new market with new customers.”

In what was possibly a jibe at Salesforce.com, Kagermann said A1S will be a “complete suite, not just sales force support but also [support for] mission-critical businesses”.

SAP will phase in new customers and will in future build tighter links between A1S and other enterprise programs, he added.

“At the beginning of next year we will see how fast we can achieve volume,” Kagermann said. “It’s a suite in a box. Technology does not just go top down, it can go bottom up.”

Lawson senior vice-president of strategy and planning Travis White said that although his company is still learning the ropes of on-demand, SAP’s A1S demands a complete change of approach on behalf of the German giant.

“This is SAP’s third or fourth attempt to get into the mid-market and they continue to define it as a product issue when really it’s an issue of customer relationships and industry knowledge,” White said. “SAP is very good at the high end but they don’t know how to simplify their product.”

White also suggested that SAP should have bought a specialist firm or created a separate subsidiary to enter the on-demand mid-market.

Nigel Montgomery of analyst firm AMR Research said SAP’s A1S will change the thinking of ERP buyers.

“The debate isn’t about whether A1S is a good product but the effect it has on the customer, raising the issue of whether they should be looking at on-demand for more than CRM and payroll. Many mid-market companies are decentralised so they have multiple ways of doing the same thing but now they’re part of a partner network rather than linear supply chain. They’re looking again at how they work and in particular they want master data management and a single version of the truth.”

That change was in particular helping Microsoft’s progress with its Dynamics line of applications, he added.

“It’s not necessarily that Dynamics is so great but because it links to the desktop and SharePoint,” Montgomery said.