A huge part of the ERP business model is on-premises install/config. By leaving implementation to others, traditional ERP vendors avoid the risk of actually getting it to work properly. They're accustomed to selling a box of tools and pointing you to an army of consultants who will gladly take a shot at making it work. By the time you have anything to test, SAP has long since cashed your license check and booked their revenue.
SAP is not SaaS, yet. They have an offering, Business on Demand, but the Netweaver core is not SaaS, it is classic on premise.
Salesforce is biting into them. Microsoft right now has a strong campaign for cloud ERP, spearheaded by CRM. Oracle is peddling Oracle On Demand.
SAP is trying to protect their belly with this move.