SAP knows that pound-for-pound, it can’t compete with Oracle and IBM in the cloud on its own, and so it’s been using a partnership with Amazon Web Services to great effect rather than build something itself. That strategy expands into the SMB today with the announcement that SAP Business All-in-One is available for Linux and Windows, according to a blog entry by AWS evangelist Jeff Barr.

That’s not all the news SAP is announcing: the German database giant is now offering expanded certification programs for SAP Rapid Deployment and SAP Business Objects on Microsoft Server 2008 R2.

But going back to Business All-in-One, Barr describes it as “critical” to many organizations, given its combination of CRM, ERP, BI, and supplier relationship management (SRM). For the SMB, it’s a powerful value proposition.

And by throwing it in the Amazon Web Services cloud, SAP has a viable play against the likes of Salesforce.com and NetSuite – where the latter two can offer simple set-up and flexibility, SAP and AWS can offer guaranteed compatibility, a higher level of configurability, and scalability. And it puts SAP Business All-in-One on an even keel with hosted Microsoft Dynamics, a major revenue-driver for the wizards of Redmond.

An interesting side-note – Barr notes that German AWS partner and service provider VMS, itself formed by SAP veterans, has completed a TCO study that finds that deploying SAP Business All-In-One on Amazon cloud infrastructure can save as much as 69 percent over an on-premises deployment, with less dramatic but still significant cost savings across other hosting options.

With SAP’s rivals at Microsoft and Oracle both expected to make announcements around the expansion of their cloud platforms this week, it’s probably good timing that SAP is reinforcing its SMB play in the cloud now. My question is simply whether the SMB is more desirous of a more standard SaaS solution rather than manage a server in the cloud.