Looking to avoid the service disruption problems faced by rival Salesforce.com Inc. , the new service offers an "isolated" tenancy capability, Graf said. With this feature, the whole hosted service won't crash as a result of the problems of a single customer.

The service is priced at US$75 per month for each user and requires a full-year payment.

Aaron Nichols, general manager of IT at Ottawa-based Canada Post Corp. , an SAP ERP and CRM user, predicts that the hosted service will likely be reliable but said that he's not interested in using it.

"For a company of our size, with 10,000-plus full-time users, hosted solutions are not on the radar screen," he said. "I tend to view hosted solutions as more applicable to small and medium businesses."

The hosted service appears to be aimed at SAP's installed base, which should help the vendor stanch competitors' efforts to poach its customers, said Joshua Greenbaum, an analyst at Enterprise Applications Consulting in Berkeley, Calif.