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Date Posted: 04/27/2005
Microsoft, SAP Announce Partnership
SAP AG (NYSE: SAP - news) and Microsoft (Nasdaq: MSFT - news) have announced that they are jointly developing a product that will link SAP processes directly to Microsoft Office applications.
Code-named "Mendocino," the initiative is designed to help companies change the way employees access information and analyze data, according to SAP.
The product is set for release during the fourth quarter of 2005.
Developing Situation
Although full details about Mendocino have yet to be released, SAP did note some processes that would be integrated with Microsoft Office, including time management, expense tracking and budget monitoring.
With the new product, for example, employees will be able to use extended application menus and select process options in a SAP-specific panel, then synchronize the information between Microsoft Exchange Server and SAP.
The information can then be retrieved in Microsoft Excel.
In the partnership announcement, SAP noted that more than 46,000 of its installations run on Microsoft Windows, more than on all other platforms combined.
Makes Sense
The partnership between SAP and Microsoft is not surprising, according to Yankee Group analyst Sheryl Kingstone.
"Customers that are SAP-centric also tend to demand the coexistence of Microsoft," she said. "They like to sit within Microsoft."
The composite application should prove popular for those users, and extend the reach of both SAP and Microsoft to other companies.
"It makes sense for SAP and Microsoft to work together like this, and customers will be pretty happy about it," said Kingstone. "It gives them the best of both worlds."
Higher Goals
Although the deal with Microsoft will give SAP a slight development edge over rivals like Oracle (Nasdaq: ORCL - news) and Siebel (Nasdaq: SEBL - news), it will probably not retain that advantage for long, Kingstone said.
Because the deal has no exclusivity, it is likely that Oracle will pursue a similar partnership, and Kingstone noted that Siebel is already in talks with Microsoft for a deal like SAP's.
What the partnerships do most is give Microsoft the ability to reach one of its target customers: the high-end enterprise market.
"These deals take it to the next level for Microsoft, and also for the industry," said Kingstone. "It allows applications to truly work together in an embedded way."
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