Rumour: Microsoft to Buy SAP?

I don't normally comment on rumours, but this one is too plausible:

Microsoft Corp Chief Executive Steve Ballmer on Tuesday said speculation the company may buy German software firm SAP (SAPG.DE) was a 'random rumour.'

"I have nothing to say about rumours of acquisitions ... positively or negatively," he told reporters in Mumbai, when asked about an acquisition of SAP.

"It strikes me as a random rumour."

Microsoft, the world's top software firm, on Monday sold a $3.75 billion debt issue, sparking talk that it could be readying a bid for the German firm.

SAP's Co-Chief Executive Leo Apothekar said on Monday he believed the business software maker should stay independent, following the fresh speculation in European markets that Microsoft could bid for it.

Irrespective of rumours, Microsoft would be the perfect suitor for SAP since the latter is one of the last major bastions of proprietary software in Europe, and favours software patents.

That's no surprise, since Enterprise Resource Planning - SAP's heartland - is one of the few software sectors where open source has failed to make significant headway yet, and software patent monopolies are a great way to lock out up-and-coming free alternatives to high-priced closed-source solutions.

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Homage to Catalonia

There is something of a battle going on over the use of open source by local and national governments. Mostly, this centres on cost, together with various technical issues. But one area that is frequently overlooked is the fact that open source software that is created by such bodies can also be used free of charge by businesses. In other words, there may be knock-on benefits that would never be produced through the use of broadly equivalent proprietary solutions....

On Open Enterprise blog.

Open Source ERP Comes of Age

Earlier this year, I called open source Enterprise Resource Planning (ERP) the “Cinderella of the business free software world”. But even then, I was aware of considerable activity in this sector, and that it was a matter of “when” rather than “if” ERP made its big breakthrough into the mainstream....

On Open Enterprise blog.

Is this Open ERP's Big Breakthrough?

On Open Enterprise blog.

Less Dosh for OSS...And So?

On Open Enterprise blog.

Open ERP's Big British Chance

On Open Enterprise blog.

So That's Why They Call the Company SAP

SAP AG will not be impacted by open source ERP software, chief executive Henning Kagermann is adamant.

Despite evidence of open source creep, Kagermann thinks it is still a database and OS-level model. He tackled the rise of open source in a recent interview with ComputerWire.

“It is an option for operating systems and databases but not at the business application level,” he said. “There are no open source ERP products that are any good for the high end, although it could be argued that they could be developed for the low end.”

So writes Angela Eager - who, parenthetically, used to work for me: wotcha, Angela.

Poor old SAP: the fact that proprietary software vendors in every market - including operating systems and databases - have said precisely the same thing when challenged by open source from below seems not to have penetrated the poor chap's skull. ERP is not special (and open source ERP is flourishing.)

So let's say it in easy-to-understand terms: you cannot defend yourself from low-end creep by pinning your hopes on up-market products. Try reading The Innovator's Dilemma to find out why.

Open Solutions Alliance

Another day, another open source organisation:

The Open Solutions Alliance consists of leading companies dedicated to making enterprise-class open source software solutions work together. We help customers put open source solutions to work by enabling application integration, certifying quality solutions, and promoting cooperation among open source developers. Membership is open to organizations that provide high-quality, business-ready open source solutions.

More specifically, it consists of companies like CentricCRM (customer relations management), Hyperic (systems management), JasperSoft (business intelligence) and OpenBravo (enterprise resource management), as well as more general open source players like CollabNet and SpikeSource.

What's striking about these is that together they form pretty much a complete open source enterprise stack of the kind I wrote about half a year ago. This is something we're going to see much more of, as individual open source companies start banding together to present a common front in order to satisfy the demands of large companies who want integrated, working solutions, not a ragtag bunch of codebases.

SAP's Success is Being Sapped

SAP is a strange company. Largely unknown to the general public (at least outside its native Germany), it is large, and until now, hugely successful in its chosen field of Enterprise Resource Management. It is also a dinosaur and doomed. Indicative of this is its very ambivalent attitude to open source, which some of its executives show little sign of understanding.

This story from the Reg confirms my suspicions: that its power is being sapped by rival closed-source companies. Just wait until the up-and-coming open source ERP companies start hitting their stride....