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According to The Wall St. Journal, SAP and Microsoft are planning to announce a partnership on Wednesday under which Microsoft will name SAP as the ‘preferred provider’ to customers for its budgeting, planning and forecasting software.
The two companies have collaborated together in the past under efforts to make their software work better together. And as the WSJ article points out, both companies share an intense dislike of Oracle. Microsoft competes with Oracle in the database market while SAP and Oracle lock horns in the business applications space. Oracle also sells a budgeting and planning program that competes directly with the SAP software that Microsoft is positioning to customers in the new partnership.
According to the WSJ article, Microsoft and SAP will also make joint sales calls with customers and team up at events together.
The partnership makes sense on several fronts. Many SAP customers run their business applications on Windows. And even though SAP supports multiple database environments, including Oracle, this could potentially be a shot in the arm for SQL Server. Plus, in the face of a weak business market, it doesn’t hurt to have a partner with a lot of marketing muscle and feet on the street to help push your company’s products.
SAP may have some other weapons lined up in its arsenal. For instance, CEO Leo Apotheker told journalists in Berlin yesterday that it’s planning on giving customers the option to buy or rent software in the future. This is a smart play, particularly as large customers grow increasingly frustrated with being locked into rigid licensing agreements and are seeking options to make their IT spending more variable and agile. The 'buy versus rent' option may also help differentiate SAP from Oracle down the road.
At the press event, Apotheker declined to comment on rumors that Microsoft was mulling a takeover of SAP. My sense is that he would prefer to keep SAP independent but that he and SAP’s directors wouldn’t rule out a sale if it were to generate a substantial premium over its current stock price ($32.83 on Wed. morning) and if it represented the right fit for SAP and its customers and shareholders. Time will tell whether this most recent partnership with Microsoft is part of a courting period.
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