SAP has announced a set of integrated on-demand enterprise resource planning (ERP) applications small and medium enterprises, due to arrive next year.

The hosted service, code-named A1S, will be an integrated suite of tools to run various business processes, such as order to cash. The tools have been in development for three years so far, said executives at the Sapphire 2007 user conference in Atlanta this week.

The service is aimed at small and medium enterprises that shy away from packaged ERP systems because of cost, complexity and other issues - but the price of the hosted service has still to be announced.

Meanwhile, SAP announced plans with Microsoft to update the company's joint Duet product first launched in May 2006 - adding links to the Microsoft Office business software suite.

Version 2.0 of Duet, which will ship by the end of 2008, will allow sales personnel to access the SAP customer relationship management software through the Office desktop, the companies said. The new version will also add a link from SAP's business applications to Microsoft's SharePoint Server collaboration software.

SAP also announced that the Duet software will be preloaded on Hewklett-Packard's ProLiant servers beginning this June.

Meanwhile, SAP also unveiled SAP E-Sourcing On-demand, a hosted application that can be used to automate requests for proposals and online auction processes. The service is priced at $10,000 and is now available, officials said at the conference.

SAP's Governance Risk and Compliance unit brought out the GRC Risk Management application, to help corporate chief financial officers react to financial risks, the company said.