Microsoft and SAP merger plans unveiled

Ahead of its antitrust trial in San Francisco, Oracle has uncovered evidence of a proposed merger between Microsoft and SAP AG.

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By  Matthew Southwell Published  June 8, 2004

As Oracle began its antitrust trial in San Francisco yesterday, during which the software vendor hopes to free itself from the legal shackles currently preventing it from pursuing its US$7.7 billion hostile bid to buy PeopleSoft, it emerged that Oracle was not the only company toying with takeovers last year. During its pre-trial discovery, Oracle unearthed details of a proposed merger between the world’s largest software company and biggest enterprise resource planning (ERP) player on the planet, Microsoft and SAP AG. While few details of the merger have emerged, both vendors have issued press statements explaining their actions. Microsoft confirms that late last year it initiated preliminary discussions with SAP to explore the possibility of a potential merger between the two companies, but a few months ago the Redmond giant ended these discussions due to the complexity of the potential transaction and subsequent integration. It further stated that it had no intentions of resuming these talks. As for SAP, the German company has broken its ‘no comment’ policy when it comes to discussing industry rumours and potential takeovers. In its statement, the enterprise application vendor also confirms that a series of meetings took place. “SAP, like all publicly held corporations, routinely evaluates potential opportunities to strengthen its leading position in the enterprise software market, and the disclosure made today should be interpreted this way,” said Henning Kagermann, chief executive officer of SAP. Since the proposed merger was taken off the table, SAP and Microsoft have continued to strengthen their relationship by entering into joint development partnership around web services and a patent cross-licensing agreement on May 12, 2004. “SAP is committed to continue working together with Microsoft to make effective use of web services technology and to provide continued value to our customers,” said Kagermann. “SAP remains steadfast in delivering a host of enterprise software solutions and services that are open and flexible to satisfy the needs of its customers around the globe,” he added. Microsoft also appears keen to pursue a strategy of openness within the ERP space and eight days after signing its cross-licensing agreement with SAP the Redmond giant announced that Oracle had joined its Microsoft Visual Studio Industry Partner (VSIP) programme as a premier-level partner, an initiative designed to provide tighter integration between Oracle’s database offerings and Microsoft’s Visual Studio .Net 2003.

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