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According to reports which surfaced over the weekend, SAP is in ‘very advanced talks’ with Tibco about a possible acquisition. SAP officials haven’t commented on the report but an SAP/Tibco deal would make a lot of sense for SAP for several reasons.
Although SAP is still the leader in the global market for business applications, Oracle and other rivals have been chipping away at its lead in recent months. Meanwhile, one of the fastest growing businesses for Oracle is its Fusion middleware system, which is based on Sun’s Java software. Demand for middleware and data integration software continues to grow as enterprise shops look to tighten connections between both business applications they’ve absorbed either through acquisitions or between disparate business divisions. Plus, as organizations continue to place more of their data in the cloud, they’re looking for software tools that can help them to more easily integrate premise-based and online systems.
A Tibco acquisition would provide SAP with that kind of fit, particularly as the German software maker expands its Software-as-a-Service strategy. At a SaaS conference held in Amsterdam in June, SAP announced plans to roll out a series of “function-specific” SaaS applications that would plug directly into its premise-based SAP Business Suite. The SaaS applications are to be powered by SAP’s Java-based Frictionless platform that it gained through its acquisition of Frictionless Commerce three years ago. The SaaS apps would include a mix of existing products, such as SAP’s CRM on-demand system, plus planned software such as an expense management module that’s scheduled to be introduced in mid-2010.
By acquiring Tibco, which is a leader in the middleware space, SAP would not only be purchasing a sizeable installed base of existing customers but it would also set the foundation for its enterprise SaaS strategy as well as helping to support both its midmarket-targeted Business ByDesign efforts. Tibco middleware software could also be marketed to existing or would-be SAP ERP customers to integrate legacy systems and other business applications they’ve accrued to their software inventories with their SAP environments.
Although Oracle has kept its Java plans close to the vest, you can be sure that Java will play significantly into any future plans they have for Fusion. For SAP, Tibco would give them an effective counter-punch.
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