U.S. software giant Microsoft and German business software maker SAP announced plans on Wednesday to work closer together to improve products and simplify connections with other programs.
The software behemoths, both leaders in their respective fields which simultaneously compete and collaborate in different areas, said the deal was a response to customers demanding better and cheaper interoperability between computer systems.
"This is about standardizing the way applications talk to each other. There's so much overhead we can skip," said Wilfried Grommen, Microsoft's European business strategy manager.
The announcement was made around an SAP conference taking place in New Orleans. SAP also extended other partnerships, some with Microsoft rivals like Sun Microsystems and International Business Machines Corp., to increase sales to their systems and customers. (MSNBC is a Microsoft - NBC joint venture.)
Analysts said SAP had most to gain from the Microsoft deal. "This deal is more important to SAP than to Microsoft," said Philips Carnelley, a research director with Ovum.
A raft of agreements between the two firms was aimed to make it easier and cheaper for customers to run SAP on Microsoft software and link it to many other existing or yet to be developed Microsoft-based programs.
"SAP has to work a bit harder for the Microsoft environment, because Microsoft customers expect ease-of-use. It's one of the reasons they deploy Microsoft," Carnelley said.
Windows is key
SAP's software, which helps automate manufacturing and other production and administration processes, has been designed for java and Linux and Unix-based environments rather than Microsoft software, analysts said. Yet, over half of its systems run on Windows operating software made by Microsoft.
The two companies agreed that SAP will support technology that Microsoft uses in its .NET products, for better interoperability between SAP and other software when using the Internet.
SAP and Microsoft will make it easier to use SAP systems with Microsoft's Office software applications, such as Excel, as well as with smart devices such as pocket PCs powered by Microsoft Windows software.
In addition, SAP will embrace standards used by Microsoft programmers who develop software that works with SAP's systems.
The two companies agreed to cross-license some of their technology, as part of their expanded alliance.
Apart from providing operating and office software that works in conjunction with SAP software, Microsoft also makes its own enterprise planning software. Unlike SAP however, which sells big systems to help automate major enterprises, Microsoft targets small and medium-sized companies with standard software.
