The on-demand CRM marketplace is heating up, with SAP preparing to wade into battle with Salesforce.com, and IBM increasing its focus on the hosted applications sector with the launch of programs designed to support developers and marketers of Web-based enterprise software.

SAP Readies On-Demand CRM

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Many industry observers say SAP is becoming increasingly concerned as Salesforce.com gains traction among large enterprises. Last week, for example, the San Francisco-based CRM vendor revealed that Merrill Lynch has signed on for 5,000 seats of its hosted software. Other big customers include ADP, Kaiser Permanente and Nextel.

IBM announces hosted application plan

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Noting that demand for hosted applications is growing, IBM cited recently published numbers from researcher IDC that showed the software-as-a-service market reached $4.2bn (£2.3bn) in 2004 and estimated that the segment could exceed $10bn by 2009.