Documents reveal Microsoft's SAP strategy
Published: 30 Jun 2004 14:50 BST
Nothing has caused more of a sensation during the Oracle antitrust trial than Microsoft's merger talks with SAP.
The public got a closer glimpse at the secret discussions last week with the release of a set of confidential documents related to the proposal.
Microsoft approached SAP last year about a merger, shortly after Oracle launched its hostile bid for PeopleSoft. The merger would have put Microsoft into the high end market for business software -- a move company documents say it wouldn't pursue by other means. But the companies abandoned the proposal -- which Microsoft had code-named Project Constellation -- earlier this year after deciding that the merger would be too complex.
Microsoft and SAP revealed the aborted plans on the opening day of the Oracle trial, knowing that Oracle planned to drop the bombshell to bolster its case. Oracle contends the US Justice Department ignored Microsoft and a handful of other Oracle rivals in its decision to oppose a PeopleSoft buyout.
The documents released in the case, which can be downloaded here, include a PowerPoint presentation dated 5 January, 2004, in which Microsoft outlined its rationale for buying SAP -- undoubtedly a costly proposition, given that the German company's market capitalisation exceeds $52bn (£28.8bn). With SAP, Microsoft saw the chance to strengthen its relationships with multinational companies and computer services firms, and the opportunity to promote its Windows products among SAP's 20,000 customers.
The document, marked highly confidential, uses an elaborate set of code names, referring to SAP as "Sagittarius," Oracle as "Ophiuchus," PeopleSoft as "Pegasus," and Microsoft as "Mensa."
The Justice Department released the document during the testimony of one of its key witnesses, Microsoft senior vice president Doug Burgum. The agency's lawyers highlighted one bullet point in particular. An SAP acquisition would give Microsoft a leadership position in back-office applications among the Fortune 500 -- "an objective we will not pursue in absence of this combination," the document states.
Oracle contends that Microsoft's merger talks with SAP prove the company is determined to compete in the "high-function" business applications market one way or another -- a claim that Microsoft and the government deny.
Did you find this article useful?
74 out of 147 people found this useful
Digg
Slashdot
Del.ici.ous
Stumble
Reddit
