Could SAP Expand Into Platform-As-A-Service?

Coghead was one of the more visible startups in the realm of cloud computing. The Redwood City, Calif.-based Coghead, which went live in October 2006, offered customers an online application development and hosting platform. The service runs on Amazon's Elastic Compute Cloud service.

SAP isn't saying much about its plans for the Coghead technology, but apparently the German software giant intends to use the technology in-house -- for the moment -- rather than offer it as a commercial service to its customers. Such a move would put it in direct competition with other PaaS vendors, including Salesforce.com, Google and startup Caspio.

SAP will discontinue the service to current Coghead customers, who only have until April 30 to access their applications and download their data, according to a letter to those customers from Coghead CEO Paul McNamara. The letter, issued Thursday, blamed Coghead's failure on "the impact of economic challenges."

SAP intends to use the Coghead technology as an internal tool for at least the time being, according to comments by SAP executive Shabana Kahn posted on the TMCnet Web site.

SAP is best known for its on-premise, enterprise-class SAP Business Suite ERP and CRM applications. But more recently the company has waded into the market for Software-as-a-Service applications with its Business ByDesign on-demand ERP software for midmarket customers.