Microsoft reveals SAP acquisition attempt

7 June 2004 Software giant Microsoft has been forced to admit it tried to buy SAP, the world’s biggest enterprise applications software vendor, earlier this year.


The news emerged in a statement issued today ahead of the opening of Oracle’s court challenge to the US Department of Justice’s (DoJ) block on its hostile bid for rival PeopleSoft – a court case that is expected to be packed with revelations.

In a terse statement, Microsoft said it made the acquisition approach towards the end of last year. The timing was no coincidence, coming six months after Oracle launched its move on PeopleSoft, and the seriousness of Microsoft’s intent can be gauged by the fact that the talks lasted for four or five months.

The Microsoft announcement said the discussions faltered on concerns over the difficulties involved in merging its vast business with that of Walldorf, Germany-based SAP. “Microsoft ended these discussions due to the complexity of the potential transaction and subsequent integration,” said the software giant in the statement.

But both companies would have also weighed up the possibility of the deal being stopped by the DoJ or the European Commission. Microsoft has a strong and growing share of the applications market for small and mid-sized companies, while SAP dominates the enterprise applications market.

The disclosures provide some explanation for Microsoft and SAP’s response to Oracle’s year-long campaign to acquire PeopleSoft – a proposed deal the DoJ has said would thwart competition at the high end of the business applications software market. Microsoft’s support for the deal had surprised many observers given the historic hostility it has towards Oracle, as did SAP’s nonchalance at the possibility of a stronger competitor emerging as result of an Oracle-PeopleSoft combination.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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