Salesforce.com, provider of online tools to help companies, released a new version of its on-demand customer relations management software on Monday.

The services have been popular among small to medium sized businesses (SMB'S), who do not have the resources to set up sophisticated management software on site. The new Salesforce offering, called Summer 06 and Connector for SAP, mark the company's latest efforts to attract larger clients and compete against traditional CRM providers.

We're aggressively targeting SAP's installed base, said Kendall Collins, vice president of product marketing for Salesforce.

Connector for SAP R/3 allows users to synchronize their Salesforce software with back-office SAP R/3 services, allowing enterprises to unify their internal and external applications. Connector for SAP R/3 is free to Salesforce Unlimited Edition customers, but $12,000 a year for Enterprise Edition users.

Saleforce's Summer '06 CRM software aims to improve the customer information gleaned from sales, marketing, service, support and mobile devices through a variety of new and enhanced technologies, the company said.

The competition for online sales solutions has been heating up. In addition to offerings already available from SAP, Oracle also has their own offerings with its recent purchase of Siebel systems. Last week Microsoft also entered the arena with Dynamics CRM software.

Despite new competition there is room for these contenders to breathe. Right now, for example, Salesforce has 350,000 U.S. users, versus 28 million customer-facing employees. The opportunity outside the U.S. is likely 2-3 times as large, Kash Rangan, a software analyst at Merrill Lynch, said.

"The SMB [small- and medium-sized business] market for OnDemand applications is relatively untapped,' Rangan added, reiterating his Buy recommendation for Salesforce.

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