SAP has set an aggressive customer target for its yet-to-be-released hosted small-business ERP service, a goal some analysts say may be unrealistic.

Chairman and CEO Henning Kagermann said at an event in New York this week that he expects 10,000 customers to sign up for the SAP Business ByDesign service by 2010, even though it won't be available until next year.

How SAP will reach that goal is unclear, said Henry Morris, an analyst at IDC.

"They need to have some kind of focus on what type of [small business] they are targeting," he said, noting that SAP is not aiming the service at departments within large companies. "You wonder where all these [customers] are going to come from."

"SAP put out some very aggressive statements that may be tough to reach," added Dan Sholler, an analyst at Gartner.

Potential rivals include Microsoft, and NetSuite.

The service, code-named A1S, will offer hosted versions of SAP's manufacturing, purchasing, accounting, sales and marketing, and human resources applications.

Peter Novack, CEO of SunFlower, a maker of lighting fixtures, said he had been searching unsuccessfully for a hosted service offering integrated applications for small businesses.

SunFlower is one of 20 US and German companies now testing the service, which Novack said is so far meeting his needs.

"There isn't an [on-demand] solution today that does what I'm looking for." he said. "It's intimidating for a small company."