SAP and the science of market disruption

German enterprise software vendor SAP is open to an acquisition by US technology groups, according to a Financial Times report yesterday:

[…] Hasso Plattner, supervisory board chief at the German group, said in an interview with FT Deutschland, the FT’s sister paper: “There are only three potential buyers: IBM, Microsoft and Google. I don’t see anyone else. If shareholders think that a combination, and not independence, is better, then it will happen.” Mr Plattner, who holds 12 per cent of the company, said he would have to act in the interest of all shareholders, not just himself.

I’ve always thought of SAP as a highly interesting company. In the broad enterprise software market, SAP is the Big Boy who, if he sneezes, everyone else at whatever tier they’re in will catch a cold. And, from the glass-half-full point of view, when they do well others tend to also.

Much of my view about SAP is born out of their intelligent advertising you see all over Europe especially in airports, the ads that have the corporate tag line saying “the best-run businesses run SAP.” Those ads have a strong ring of credibility as they have featured many well known and trusted companies, focusing on those companies rather than on SAP.

SAP have just ended Sapphire, their US developer conference. It was widely blogged as this story at ZDNet highlights (hat tip to Dennis Howlett), providing some excellent insight into some of the inner workings and thinking at SAP that you’d otherwise learn about only if you were an active participant in their customer and developer communities.

So you have this monolithic European company, a German one to boot, now doing all sorts of social media-type things (podcasting, for instance) and whose chairman and previous CEO is openly talking about his company being acquired. And this would be no small deal:

[…] A takeover of SAP would be a stretch for most companies, given its market capitalisation of more than €50bn ($64bn) and the fact that it is in the middle of a period of immense organic growth.

Microsoft and SAP? It’s been talked about before. Google and SAP? Already some speculation about that.

It’s as though a slumbering giant has awakened. What impact or influence a combination of SAP+ will have on the software market would likely be enormous. Others more knowledgable than me about deep trends and potential developments will no doubt have keener and more nuanced views than mine.

Of course, it may be nothing more than smoke with no fire at all.

Neville Hobson

Social Strategist, Communicator, Writer, and Podcaster with a curiosity for tech and how people use it. Believer in an Internet for everyone. Early adopter (and leaver) and experimenter with social media. Occasional test pilot of shiny new objects. Avid tea drinker.

  1. Jeff Clavier

    Interestingly, Steve Ballmer recently mentioned that if there is one acquisition or merger that he would have like to see happen, it is a combination of Microsoft and SAP.

  2. neville

    It would certainly turn the enterprise market upside down, Jeff. I can imagine SAP and Microsoft Business Solutions as a tremendous combination, a one-stop-shop for corporations of just about any size.

    But maybe that’s too traditional a view. More a Web 1.0 one.

    Maybe SAP, MBS and the emerging enterprise bits of Google? Now that would be most interesting.

  3. Dennis Howlett

    An SAP/MSFT combination that sweeps up Sage along the way makes a lot of sense to me. If Microsoft Business Solutions (which has had a pretty dismal time of it under Doug Bergum’s management) was used as an acquisition vehicle, the combined buisness could then be spun out to create an apps comany that spans VSB/SME/MSB and enterprise. In turn, SAP’s management could become the strategy setters. This is something I believe should happen as a way of allowing MSFT the opportunity to concentrate on its core business. Who knows, such a move might add value for beleagured MSFT shareholders.

  4. neville

    I remember meeting Doug Burgum in Fargo when he ran Great Plains, before Microsoft acquired it. A very dynamic man, one able to blend GP’s different culture into that of MS relatively seamlessly. Even if MBS hasn’t done as well as some expected under his leadership, he’s been rewarded with his top-job promotion last year.

    Sage. That could be interesting. Profits up as latest results show, although stagnant growth over long period according to FT report. Says they’re planning “further acquisitions and greater organic growth in the second half.”

    Worth watching, then.

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