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SAP to wind down software product for small businesses -magazine

FRANKFURT (Reuters) - German business software maker SAP (GER:SAP) is winding down a web-based software product for small to mid-sized businesses, a German magazine reported.

Business weekly Wirtschaftswoche said SAP would stop the development of a software dubbed Business By Design, although existing customers will be able to continue to use it.

An SAP spokesman said on Saturday that development capacity for Business By Design was being reduced, but that the product was not being shut down.

SAP, one of the world's biggest makers of business management software, originally projected that Business by Design - which was launched in 2010 - would reach 10,000 customers and generate $1 billion of revenue.

The magazine reported, however, that the product, which cost roughly 3 billion euros to develop, currently has only 785 customers and is expected to generate no more than 23 million euros in sales this year.

By comparison, in the second quarter, SAP's software and software-related service revenue stood at 3.35 billion euros.

SAP started working on Business by Design in 2003 to diversify sales beyond its traditional market of large corporations and government agencies, trying to compete with software sold by NetSuite (NYS:N), a company founded more than a decade ago by Oracle (ORCL.N) Chief Executive Larry Ellison.

The Wirtschaftswoche report said that ever since the SAP product's launch, customers had complained about technical issues and the slow speed of the software.

SAP declined to provide any specific comment on investment expenditures, sales figures or customer numbers of Business by Design.

(Reporting by Ilona Wissenbach; writing by Arno Schuetze. Editing by Jane Merriman)