SAP buys PaaS vendor Coghead's intellectual property

Deal follows Coghead's decision to shut down; SAP says it will use PaaS tools only internally

SAP AG has bought the rights to the intellectual property of Coghead Inc., a vendor of platform-as-a-service (PaaS) tools that is in the process of shutting down.

However, an SAP spokeswoman said that at least for now, the business applications vendor plans to use Coghead's software only internally. She declined to disclose the financial terms of the deal between the companies.

Coghead is one of numerous vendors, both large and small, that have developed PaaS tools — cousins of software-as-a-service applications that can be used to create cloud-based apps. Coghead's PaaS offering provides a visual editing environment, workflow and integration tools and a database, along with an underlying computing infrastructure provided through Amazon.com Inc.'s Elastic Compute Cloud.

But earlier this week, Coghead said it is closing. The company cited "economic challenges" in a letter to customers that has been posted on the TechCrunch Web site. The letter didn't mention the intellectual-property rights deal with SAP.

The spokeswoman for SAP said it will reveal more information about its plans for using Coghead's technology in the coming weeks. But the ERP vendor has no current intentions to market the technology commercially, she said, adding that SAP is "working to help Coghead customers transition to new service providers without interruption."

PaaS tools are also available from the likes of Salesforce.com, Google and Microsoft, as well as smaller vendors such as Caspio Inc. Caspio and several other vendors are offering migration incentives to Coghead customers, who can continue to use the Coghead service on an unsupported basis through April 30.

Coghead's technology is a good fit for SAP, having been a popular PaaS option among the community of SAP developers, according to Michael Coté, an analyst at consulting firm RedMonk. In addition, SAP's venture capital arm invested in Coghead two years ago, a move that "sort of blessed" the PaaS vendor's technology for use by SAP developers," Coté said.

He noted that there also is a "thriving subculture" of SAP developers who are interested in using emerging technologies. One example, Coté said, is the Enterprise Social Messaging Experiment, a Twitter-like messaging service being developed by SAP community members.

Copyright © 2009 IDG Communications, Inc.

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