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SAP inks deal with American Express

The credit card giant will resell in the United States the software maker's SAP Business One program, designed for small to midsize companies.

American Express has agreed to resell business-management software from SAP to small U.S. companies.

SAP, based in Waldorf, Germany, announced the American Express distribution deal on Thursday in conjunction with the U.S. release of SAP Business One, a software package designed for companies with as few as 10 employees.

Under its agreement with SAP, a unit of American Express called Tax and Business Services will market, sell and support SAP Business One in the United States. By September, a cobranded version of the software, called the American Express Edition, will also be released. The Tax and Business Services unit employs a staff of 150 information technology consultants in the United States, who will be in charge of reselling SAP software, said Christine Levite, an American Express spokeswoman.

The distribution deal is exclusive to neither SAP nor American Express, said Levite.

SAP released Business One in Germany and a handful of other European countries last year. Its release in the United States is a few months behind schedule. SAP had initially planned a U.S. launch for the end of last year.

The software, built from applications that SAP gained in its acquisition last year of Israeli company Top Manage Financial Solutions, is designed to streamline accounting, human resources, sales and purchasing activities.

The price of the software package is $3,750 per user with a minimum of three users.

The Business One product is part of SAP's recent push to sell to small and midsize businesses. The company's goal is to grow revenue from that segment of the market from around 6 percent of software license revenue last year to at least 15 percent by 2005, according to Gary Fromer, vice president of small and midsize business at SAP America, the German company's U.S. subsidiary. SAP reported $2.46 billion of license revenue last year.

Selling software through distributors is a departure for SAP, which typically sells directly to large, multinational customers through its own extensive sales force. In addition to the deal with American Express, SAP has enlisted Hewlett-Packard to help it sell software to small companies.

It's also not the first time SAP has attempted to build a distribution channel for its software. The company launched a similar program in 1996, then quietly shut it down a couple years later after signing up just a few hundred customers.

This time around, SAP faces formidable competition from Microsoft, which recently announced a new initiative to increase sales of a competing set of applications through its Microsoft Business Solutions division. Redmond, Wash.-based Microsoft has assigned its head of worldwide sales to lead that effort.