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Microsoft Businesses

What Might Have Been: Microsoft Almost Bought SAP 208

steveorama writes "This article from Bloomberg indicates that 'Microsoft Corp, the world's largest software maker, approached late last year about buying the German company, a combination that would have vaulted it to the biggest seller of software for business applications.'" The talks came out in advance of likely disclosure in the ongoing merger battle involving Oracle, PeopleSoft and the U.S. Department of Justice. An anonymous reader points to this article in the Financial Times, adding "Microsoft says the discussions were halted due to the complexity involved in the transaction and in integrating the two companies. A merger with SAP would be a profound break with previous Microsoft strategy, and would likely have raised eyebrows among regulators."
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What Might Have Been: Microsoft Almost Bought SAP

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  • by jwcorder ( 776512 ) on Monday June 07, 2004 @05:35PM (#9360757)
    I break wind and raise an eyebrow or two...MS buys a dumpster and the eyebrows of the DOJ raise so high they knock their own hats off.
  • by BigFire ( 13822 ) on Monday June 07, 2004 @05:35PM (#9360759)
    with the German anti-trust law, which are a wee bit more strigent than the US anti-trust law.
  • Mmm right... (Score:4, Insightful)

    by Anonymous Coward on Monday June 07, 2004 @05:37PM (#9360780)
    Would likely have raised eyebrows among regulators.


    Like that'd bother Microsoft.
    • A few years ago, that company from the Pacific Northwest tried to buy Intuit and it was stopped by regulators (Money + Quicken!).

      Probably, if you can't compete with them, just buy them. "Hey, I have a few tens of billions of dollars burning in my pocket"..
      • Re:Mmm right... (Score:4, Interesting)

        by Maserati ( 8679 ) on Monday June 07, 2004 @08:45PM (#9361894) Homepage Journal
        I was in software retail when MS MOney was launched to compete with Quicken. We had stacks of Quicken for $49.95 and stacks of MS Money for, ultimately, $5.00. We couldn't move MS Money at any price. People would walk right by the huge endcaps MS paid for to spend more on Quicken.

        In a nice demonstration of the Law of Perceived Value, sales of MS Money fell off as the price went down. People figure that if it's marked down that heavily, then it must suck. Pretty much everyone who bought it at all paid at least $39.95 for it.

        Then they tried to buy Intuit and the FTC raised an eyebrow.
  • by eltoyoboyo ( 750015 ) on Monday June 07, 2004 @05:38PM (#9360790) Journal
    In a huge piece of bloat- (and until a couple of years ago vapor-) ware running on top of what is already purported to be bloatware. MS was wise to stay away from that. The Great Plains (now Microsoft CRM) does not have a ton of visibility yet. Oracle is bidding on the plum piece of CRM software in my opinion (JD Edwards snapped up by Peoplesoft!). Now who is going to pick up Lawson?
    • by lucabrasi999 ( 585141 ) on Monday June 07, 2004 @05:46PM (#9360863) Journal
      huge piece of bloat- (and until a couple of years ago vapor-) ware running on top of what is already purported to be bloatware

      Of course, but is there an ERP package that isn't bloat-ware? The fact is that MS wants to get into the market and Bill has $50 billion burning a hole in his pocket. On first-look, it made sense for Bill to at least "kick the tires".

      • "Of course, but is there an ERP package that isn't bloat-ware? The fact is that MS wants to get into the market and Bill has $50 billion burning a hole in his pocket. On first-look, it made sense for Bill to at least "kick the tires"."

        That's $60 billion and counting.

      • by fatray ( 160258 ) on Monday June 07, 2004 @07:36PM (#9361538)
        Of course, but is there an ERP package that isn't bloat-ware?

        My experience is that the big ERP systems are pretty bloated. One of the things that went on with these systems was that every company had to have a whole set of "modifications" to make the ERP system fit their business. These mods were often poorly done, poorly controlled and caused no end of reliability problems. These mods often contributed to the implementation projects being way over budget and way late. These mods, that almost all of their customers did, became a major obstacle to installing new versions. One of my past employers had a highly modified ERP system that they wanted to upgrade from 2.x to 3.y. They spent serverl hundred thousand dollars implementing the mods on version 3.y and finally just gave up because it was too hard. (I wasn't on that project!) They kept using 2.x until they were acquired by a competitor (who was actually using something older, more modified, and worse).

        The ERP systems companies started making their software more "customizable" or "configurable" in an attempt to prevent mods. This made these already very large programs into true behemoths. A lot of companies still want their mods and that still causes a lot of cost and grief.

        There are some systems that are not bloated--these are often called mid-range or tier 2 systems. One that I have used is Fourth Shift. It is not a perfect system, but it is low bloat and can be implemented pretty quickly and reasonably painlessly. I've installed FS into 4 businesses and each of those projects went very well. Some of these suppliers of smaller systems don't allow mods by the simple expedient of not distributing source code.

    • Are two different things. MS CRM has their own product, named CRM Server. It merely integrates with GP products, but does not replace them.
  • by ErichTheWebGuy ( 745925 ) on Monday June 07, 2004 @05:38PM (#9360796) Homepage
    If it had happened, I think we might have seen Microsoft suffer the same fate as ma bell. Oh well, M$ will still have their day.
    • If it had happened, I think we might have seen Microsoft suffer the same fate as ma bell. Oh well, M$ will still have their day.

      I'm not so sure of this. While the regulatory powers did not see fit to break up Microsoft in the last round, it seems unlikely that they would approve of acquisitions of the SAP type either. I think truthfully, Microsoft's acquisition tentacles are to some extent being held at bay for the time being. This, of course, does not prevent them from continuing to screw everyone with t

      • Yea, true enough. But, the point was, if it had been allowed, it would only have been more ammunition for the feds.
      • by The Lynxpro ( 657990 ) <lynxpro&gmail,com> on Monday June 07, 2004 @06:31PM (#9361178)
        "I think truthfully, Microsoft's acquisition tentacles are to some extent being held at bay for the time being. This, of course, does not prevent them from continuing to screw everyone with the technologies that they currently control."

        And that's the problem with Microsoft. They either are downright stupid or suffer from massive hubris. They seriously need to split apart because although they apparently won the antitrust case (in the long run), their size and market strength is keeping each division from making decent acquisitions to keep them competitive with other companies.

        Microsoft seriously needs to split into at least three companies, and dump MSN outright. One company would focus on operating systems and web services technology. The second company would do applications (Office) and business software (Great Plains). The third would be the videogame division.

        Microsoft's size is curtailing the success of their videogame division. The Xbox division needs to acquire some large scale publishers and try to guarantee exclusives for the Xbox Next so they don't have to heavily subsidize each machine. Buying for example Activision, Atari (Infogrames), Midway, and UbiSoft would do just that (EA will stay independent). But if they did that currently, they'd be hit with another antitrust case.

        Separating the company into three and splitting the booty of ill gotten gains evenly ($20 billion a piece since Microsoft has $60 billion now) woudl go a long way to shoring up the companies and jettison antitrust concerns. After all, we all know Microsoft Office needs to be released for the Linux platform, but as long as Microsoft stays in tact, this will not happen out of concern of jeopardizing the Windows monopoly.

        • So you propose having three compaines all with their own monopolies? You must be a MSFT stock holder.

          They should have been broken up like Standard Oil -- into compaines that have to fight each other for market share. That means one company would end up with a server OS and excel while a different one would end up with the home OS and word. That would result in decreased costs for consumers and increased competition in the marketplace.
  • Yawn... (Score:5, Insightful)

    by rewt66 ( 738525 ) on Monday June 07, 2004 @05:39PM (#9360799)
    Once Oracle went after PeopleSoft, it was pretty much inevitable that Microsoft would at least start looking at SAP. So, wow, Microsoft looked.

    It's not like this is a transit of Venus or something...
  • by The-Bus ( 138060 ) on Monday June 07, 2004 @05:39PM (#9360801)
    "Only a German company would want to put a piece of software where one program controls every aspect of the organization."

    (Non-flame, I'm German!)
    • "Only a German company would want to put a piece of software where one program controls every aspect of the organization."

      It takes extreme organization and skill to pull it off. Done well and completely, it is extremely effective. Done less than perfectly, the imperfections are automated with predictable results.

      My impression is that SAP can make or break a company. It would be interesting, in a morbid sense, to watch the combination of Microsoft and SAP. You can automate what you understand. Automation
  • It's true, Microsoft REALLY has to make sure the company strategies of the ones they buy are inline with theirs. Otherwise, they would be setting themselves up to lose MILLIONS of dollars.
  • by Weaselmancer ( 533834 ) on Monday June 07, 2004 @05:41PM (#9360814)

    Microsoft would merge with SAP the same way I merge with a cheeseburger.

    Weaselmancer

  • by mrchaotica ( 681592 ) on Monday June 07, 2004 @05:42PM (#9360825)
    It seems pretty counterintuitive to me that a monopoly would be allowed to merge with anything, even a small company.
  • by Mike Hawk ( 687615 ) on Monday June 07, 2004 @05:42PM (#9360831) Journal
    Microsoft does nothing. Details at 11.
  • Bullshit (Score:5, Interesting)

    by Anonymous Coward on Monday June 07, 2004 @05:44PM (#9360847)
    Pure bullshit.

    MS want ERP vendors to think they almost acquired SAP. Then ERP vendors will think wow that could be us. How can we make ourselves more attractive to MS for buyout. I know, we'll program a bunch of .net crap in.

    This gets vendors to try to play extra nice with .net when the business market place has pretty much said J2EE is what we want.
  • Red Hat announced today that they almost bought TAR.

  • ...MSFT did themselves a favor looking at SAP and not Computer Associates [linuxworld.com]!
    • More than a few companies have IT policies that prohibit them from purchasing software that CA sells, and to divest any product if CA acquires the company. MS can't afford to have that much hate on them.
  • Isn't it ironic... (Score:5, Insightful)

    by Kurt Gray ( 935 ) on Monday June 07, 2004 @05:47PM (#9360874) Homepage Journal
    ...that two companies that claim to be leaders of business process simplification found that merging there operations was too complex to be feasible?
  • by mks113 ( 208282 ) <mks@nOsPaM.kijabe.org> on Monday June 07, 2004 @05:48PM (#9360877) Homepage Journal
    SAP has about the worst User Interface I've ever seen. The only exception might be old IBM terminals running on mainframes.

    For all the negative we say about microsoft, they have done a lot for generating a consistant user interface. On SAP, sometimes you have to hit enter, sometimes you click the green checkmark (in "random" locations), sometimes you click the clock icon, sometimes you hit f8.

    Unless you use it every day, you forget how to use the basic functions.

    You forget how nice it is to use Windows until you use SAP!
    • I've seen applications running on mainframes that have been quite pleasant. The problem is that most mainframe application developers neglect to put any kind of help into the programs so you just have to 'know' what they're expecting you to do and how to use it.

      With that said, I used to work for Tivoli, an IBM subsidiary, and we used RETAIN for problem tracking so that we could be tied into IBM global operations and receive support calls internationally, So I know all about crappy mainframe applications.

    • Complicated interfaces are a sure sign a German was inovled in the design process. Germans culturally have much higher expectations of their users. I have a Waldorf synthseizer (uQ for those interested) which has a CRAZY interface, it has a matrix of lights which have to be mainpulatd by knobs and buttons to edit paramaters of the synthesizer. Its crazy compared to a british synthesizer like the Supernova II which has neatly partitioned sections and buttons with well defined meanings.
    • by Anonymous Coward
      We implemented SAP here late last year. I am firmly convinced that someone thawed a bunch of brain-damaged mainframe programmers frozen since 1970, gave them a box of icons (without explaining what any of them meant), and told them to build a windowing interface.

      Kludge does not even begin to describe it.

      Even that wouldn't be so bad if it actually worked. Somewhere, SAP salesmen are laughing all the way to the bank.
    • SAP's UI is a seizure-inducing nightmare. Pretty, but completely inconsistent. Not to mention completely lacking in a text-based query facility where one is clearly called for. Type in a 100-line query you easily generated in VIm? Hell no! You're clicking through 5 dialogs times 100 "key figures", Sparky!
    • For all the negative we say about microsoft, they have done a lot for generating a consistant user interface. On SAP, sometimes you have to hit enter, sometimes you click the green checkmark (in "random" locations), sometimes you click the clock icon, sometimes you hit f8.

      No, Apple has done a lot for consistent user interfaces. Microsoft has provided a widget set and a set of programming tools, but their own programs aren't even consistent. Having just been introduced to Visual Studio.NET, I'm a lot le

  • Has anyone noticed (Score:4, Interesting)

    by zymano ( 581466 ) on Monday June 07, 2004 @05:49PM (#9360890)
    That corporate mergers have increased(Peoplesoft&Oracle,Clearchannel) under the Bush administration and no one really cares until you turn on the Cnn/moneyline and notice that the corporations aren't hiring because of HIGH productivity by their businesses. Most hirings come from small business. To me mergers mean only one thing , an attempt to monopolize.
    • What does not hiring have to do with monopolising? The main reason for mergers is the possibility of economies of scale or scope - i.e. cost cutting. This is not good for the people working at this company, but it is good for everyone else.
  • by roccothegreat ( 578663 ) on Monday June 07, 2004 @05:51PM (#9360900)
    Microsoft says the discussions were halted due to the complexity involved in the transaction and in integrating the two companies

    I think it was more a COMPLEXITY of the SAP code that M$ did not understand!

    Rocco
  • by Ann Elk ( 668880 ) on Monday June 07, 2004 @06:04PM (#9360995)

    Q: What do you get when you merge Microsoft and SAP?
    A: Microsoft

    • "Q: What do you get when you merge Microsoft and SAP?
      A: Microsoft"

      Q. How do you pronounce BP Amoco?
      A. BP...the "Amoco" is silent.

      Which reminds me, Arco is now displaying logos telling its customers that it is part of the BP family.

  • by Anonymous Coward on Monday June 07, 2004 @06:04PM (#9360996)
    MS would have been tied up, defocused, defanged, and out of our hair for YEARS with this acquisition. Gates and Ballmer (unfortunately) were wise and disciplined to pass it up. Historically, most big-company mergers wind up losing value (witness Daimler-Chrysler, a $40B abortion). Still, it's a pleasant thought :-)
  • by Altima(BoB) ( 602987 ) on Monday June 07, 2004 @06:05PM (#9361001)
    Nuts. I was looking forward to MicroSap. Yes yes yes, minus one, redundant, but much like Everest, One has to because it was there.
  • by GoRK ( 10018 ) on Monday June 07, 2004 @06:22PM (#9361112) Homepage Journal
    At least Microsoft ran away in time and were smart enough to realize that even they could not integrate with SAP.

    This is in sharp contrast to most companies who deal with SAP that end up spending up to 2 billion dollars for a product that doesn't even work.
  • Not invented here (Score:4, Interesting)

    by sapbasisnerd ( 729448 ) on Monday June 07, 2004 @06:32PM (#9361188)
    Oh yea, that will work. Take the two companies in the industry most infected with 'not invented here' disease and try to put them together.

    Does explain the SAPDB sale to MySQL a little more rationally though. That was one piece of baggage MS would not have tolerated.

    I also suspect that WGIII and Uncle Fester took a hard look at the install base, evaluated their chances of actually converting some of the largest customers, overestimated it by at least double and still realized they'd be buying into supporting a product on competitive operating system platforms and databases for a basically a decade at least. Further noticed that many of these customers have ahem connections that they'd rather not mess with (it's rumoured that Haliburton is or was the largest single instance SAP system in the world, this appeared on a chart at one SAP conference and then disappeared for future appearances of the same presentation).

    • Does explain the SAPDB sale to MySQL a little more rationally though. That was one piece of baggage MS would not have tolerated.
      SAPDB itself is not an original SAP product, it was developped from Adabas database (by Software AG), which is still supported by SAP R/3 as RDBMS. Adabas also came with StarOffice (up until 5.*, don't know for now, I am using OpenOffice since then.)
      • Well actually before it was an Adabas product (Called Adabas-D, it was NOT the flagship Adabas database) it was a Nixdorf product.

        Doesn't change the fact that until recently SAP owned the commercial rights and SAP execs in Europe were using SAPDB to openly attack Oracle and IBM and Microsoft saying in effect that databases were a commodity so use our product which is "good enough". A message that disappeared suspisciously about the time these talks were going on.

  • by /Wegge ( 2960 ) <awegge@gmail.com> on Monday June 07, 2004 @06:52PM (#9361303) Homepage
    I've always had the impression that the policy from Remond was to find the "sweet spot" for their back office applications. In this case, the best target is probably a notch or two down from the customers who are willing to bay a SAP solution.

    Whatever the reasons might be, MS in fact went ahead and bought Navision Financials instead, which probably was better for the overall backoffice strategy.
    • I supported Navision on Windows in my last job. I was concerned when, in somewhere around May 2002, Microsoft bought Navision that there would be problems, but there weren't. Navision is also meant for smaller comapnies than SAP and has some critical problems on Windows servers, such as having no database replication capability, no live backup capability and a seriously fucked interface (it originally comes from a DOS and UNIX commandline type environment and they even had their own non standard GUI element
  • Instead (Score:3, Informative)

    by boatboy ( 549643 ) on Monday June 07, 2004 @07:09PM (#9361404) Homepage
    A merger with SAP would be a profound break with previous Microsoft strategy
    Not sure how it would have been much different than strategy in other markets, but it should be pointed out they did buy out another large ERP company. [greatplains.com]
  • by rainer_d ( 115765 ) * on Monday June 07, 2004 @07:29PM (#9361494) Homepage
    Look at the market-capitalisation of SAP:

    http://finance.yahoo.com/q?s=SAP [yahoo.com]:

    Market Cap: 51.18B


    It would have cost them all their cash, but they'd have bought a company that works very much against all the way different than MSFT:

    • Linux is a Tier 1 platform for SAP
    • as someone else pointed out, they have a large installed base on non-Win32 platforms that are just going to stay that way as long as the hardware works

  • by runenfool ( 503 ) on Monday June 07, 2004 @07:38PM (#9361554)
    This sounds like what Microsoft did with Intuit and some other companies who's names escape me right now (I believe Novell in the 80s was another). They send all sorts of people over to "investigate a merger", when in reality what they are doing is learning how you do business and who your key people are.

    Perhaps this is what Microsoft's intent was with SAP?
  • by Decaff ( 42676 ) on Monday June 07, 2004 @07:42PM (#9361577)
    What would Microsoft have done with it? SAP is widely used, and profitable, but does not match Microsoft's language and operating system strategy: SAP has always been a strongly cross-platform systems and in recent years has including significant support for Java.

    It would have been astonishing for Microsoft to end up supporting J2EE applications for Sap on RedHat, at least for existing SAP users. Any move to close down the portability or application language support for an acquired SAP would surely have led to serious monopoly issues.

  • but no one could figure out how to make even the DOJ believe that the OS really needs a database enigine AND a browser intergrated with it.
  • Ah-ha! (Score:3, Funny)

    by SphericalCrusher ( 739397 ) on Monday June 07, 2004 @08:53PM (#9361942) Homepage Journal
    "Microsoft says the discussions were halted due to the complexity involved in the transaction and in integrating the two companies."

    Wow. Microsoft halts due to any sort of complexity, eh? No wonder their software is so user friendly...

  • ..the ongoing merger battle involving Oracle, PeopleSoft and the U.S. Department of Justice.
    For those not familiar, Oracle and PeopleSoft are in a bidding war to purchase the Department of Justice.
  • What little experience I have had with SAP is that it is the king of archaic over-priced bloatware. Microsoft would have choked and died attempting to absorb it. This would have gotten rid of two ugly giant blights on the industry at once. Too bad it didn't go through.
  • Microsoft Chairman Bill Gates and Ballmer have said they dislike large purchases because of the difficulty of integrating the businesses. In July 2002, Gates told attendees at an analyst meeting that 'there's a lot of hurdles that any type of acquisition has to get over.'

    Technology company merges rarely work. The techies that make a company worth having tend to find new jobs during the uncertainty of a merger. The rest have have more difficulty merging different corporate cultures than merging product l

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