Late 2003, Microsoft approached SAP to discuss the idea of a merger. After buying Great Plains and Navision, this would have been Microsoft's third and probably most successful attempt to get a substantial part of the business software market.
However, the discussions were ended by Microsoft due to the complexity of the deal and the subsequent integration. Read more at e.g. http://www.infoworld.com/article/04/06/07/HNmssap_1.html.
Imagine what such a deal would have meant for the application market. In one of the previous Eye on IT newsletters, we noted that the strategy of SAP to either go for Java/J2EE or to embrace .NET would be very important for the success of J2EE. An acquisition of SAP would have been a massive win for .NET, and a major blow to IBM's BCS, which gets a lot of revenue from SAP projects and implementation.
Just recently, SAP announced deals with both IBM (boosting joint sales to large customers) and Microsoft (boosting Web services) in 2 simultaneous press releases at Sapphire '04. It looks like SAP wants to remain a friend of both, instead of being tied too tightly to any one of them.
ADDED June 09, 2004: Forbes asked Goldman Sachs what they thought about this, and their answers were somewhat surprising to me: a) the DoJ would not even have tried to prevent this merger because Microsoft is officially not in the enterprise software market; b) Microsoft will not attempt another acquisition soon because it cannot afford to "tick off the big gorilla" (SAP) because they need them to support .NET; and c) there is "a big, big battle" brewing for Microsoft and its .NET platform against "the Java camp" with IBM, BEA, and Oracle, but you probably already knew this. Read these comments at http://www.forbes.com/markets/2004/06/09/0609automarketscan04.html.
Posted by Patrick Van Renterghem at June 7, 2004 10:09 PM