A top executive at SAP is set to outline a new strategy today for delivering software over the internet, as the German software giant struggles to respond to a market that poses a significant long-term threat to its business.

The early pace in the market for on-demand software, also known as "software-as-a-service", has been set by newcomers such as Salesforce.com, which normally charge a monthly subscription fee for customers to access their software over the internet.