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Deutsche Telekom Rivals SAP in Small-Business Web Programs

Deutsche Telekom AG, Europe’s second-largest phone company, will offer applications for small and medium-sized companies to store data and run software via the Internet, in a move that brings it into competition with SAP AG.

The operator will start the Business Marketplace platform with so-called cloud computing applications for Internet-based customer-relationship management and accounting software, Chief Executive Officer Rene Obermann said today.

“The potential among smaller companies is enormous,” Obermann told reporters at the CeBit technology fair in Hanover, Germany. “We have to make sure we get a large-enough share of that.”

Technology companies such as SAP, Deutsche Telekom, Oracle Corp., Apple Inc. and Microsoft Corp. are promoting cloud computing as a secure way to outsource data centers and reduce the need for pricey servers and other hardware. The potential market is 10.7 billion euros ($14.1 billion) for Germany, where only 12 percent of smaller businesses use cloud functions, Obermann said.

Deutsche Telekom, based in Bonn, currently has cloud-computing sales of about 500 million euros, of which about 140 million euros comes from small and medium-sized enterprises, he said. The CEO plans to boost services such as telemedicine, online marketplaces and downloads of music and games to combat a fall in sales from traditional phone services.

Less Complexity

Deutsche Telekom fell 0.1 percent to 8.65 euros in Frankfurt as of 1:12 p.m. while SAP gained 0.4 percent to 51.42 euros.

The software will target clients that don’t need the complexity that SAP systems offer, said Dirk Backofen, head of marketing for Deutsche Telekom’s German corporate business.

“Applications for large corporate customers have a certain complexity when it comes to integration and installation,” he said. “We’ll to try to make these applications simpler for smaller companies -- no bells and whistles left and right.”

The company also said it will charge private customers 39 cents for using its secure electronic letter “De-Mail,” beyond three messages per month which are free. The price compares with Deutsche Post AG’s “E-Postbief” product, which costs 55 cents per mail.

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