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SAP, Microsoft align against Oracle in business software market

Ed Scannell, Senior Executive Editor

SAP is bringing in some muscle to help in its competition with archrival Oracle, announcing today that Microsoft will now support its BusinessObjects Planning and Consolidation application on Microsoft platforms.

As part of the agreement, SAP and Microsoft will also work together to identify potential go-to-market opportunities to accelerate the adoption of BusinessObjects, which directly competes against Oracle's Hyperion line of performance management and analytics products.

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 The companies also pledged to work closely in the business software market to enhance the performance of SAP applications on Microsoft's platforms, as well as to help users "get more business value" out of BusinessObjects through improved planning budgeting and delivering on a faster and more compliant close.

In a prepared statement, Sanjay Poonen, SAP's executive vice president and general manager overseeing the company's performance optimization applications, said the deal strengthens SAP's commitment to work in both SAP and non-SAP environments. Users can expect to gain "more agility in their planning and gain greater consolidation processes" by switching to the Microsoft version of BusinessObjects Planning and Consolidation.

"We see a mutually beneficial opportunity for both Microsoft and SAP to offer their respective customers a best-in-class solution," he said.

Until earlier this year, Microsoft offered its own corporate forecasting and budgeting software in the form of PerformancePoint Server. The vendor announced it was scrapping the product and integrating its features with SharePoint Server in February after lackluster sales.

Some analysts say there is nothing particularly new in the announcement in that BusinessObjects has worked with Microsoft platforms, such as SQL Server, for some time. But that it could foreshadow other more ambitious collaborative efforts to combat Oracle's Fusion Middleware platform.

"Microsoft's continuing advancement in scalability of its tools, as well as broad adoption among enterprises of all sizes, may foreshadow other middleware efforts, especially given Oracle's investment in Fusion Middleware and SAP's failure to develop NetWeaver into a more broadly adopted and easy to use middleware. SAP will need to improve NetWeaver or turn to Microsoft, IBM, Software AG or Tibco to fix their middleware problem," said Ray Wang, a partner with the Altimeter Group.

This past July Oracle debuted Fusion Middleware 11g, which company president Charles Philips positioned as a "convergence layer" serving to more tightly integrate a number of applications and tools making up Oracle's software stack. Fusion Middleware, made up of Oracle's SOA suite, WebLogic Suite, WebCenter and Identity Management product, will be central in shaping Oracle's future cloud and SOA strategies.

This is not the first time SAP and Microsoft have worked in concert to create solutions that would compete against Oracle. The first was Duet, code named Mendocino, designed to help IT shops access and analyze data by linking SAP process functions directly with Microsoft's Office suite of desktop applications. In late 2003, Microsoft tried to acquire SAP but those talks broke off sometime in the first half of 2004.

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