Is It Them Against The World?

They've pledged to make Microsoft's .Net and SAP's NetWeaver development tools interoperable and they're co-developing Mendocino, a product that promises to expose mySAP processes and data to Outlook, Word, Excel, PowerPoint and InfoPath applications.

And, Microsoft's newly unveiled Maestro realtime scorecarding server, when properly configured, will be able to pump realtime data from SAP back-office applications into business dashboards, Microsoft said last week.

Of course, none of this is as big a deal as a merger of the two companies would have been. Last year, SAP and Microsoft disclosed that they had discussed and then nixed a merger after Oracle announced its bid for PeopleSoft. But these efforts at fruitful co-existence do give Microsoft-SAP something of a united front against Oracle and perhaps even IBM. It probably doesn't hurt SAP's motivation that Oracle CEO Larry Ellison has taken to calling SAP simply "Sap," as in sapling.

"Microsoft and SAP have decided to collaborate on how to make this work really well—as opposed to fairly well if the application source is accessed via NetWeaver rather than Maestro," said one partner source. When—and if—this all works, the impact on Teradata, Business Objects, Cognos, maybe even SAS, could be huge, he said.

There are gray areas, however: Microsoft and SAP compete in midmarket ERP, and SAP remains allied with IBM. But the fact that SAP and Microsoft are bulking up their own business intelligence talents has got to concern Business Objects, Cognos and Hyperion.

"It looks to us like SAP and Microsoft are trying to divvy up the world between them: SAP gets control of all the corporate data and application infrastructure, and Microsoft gets lock-in on their desktop monopoly and reasons to justify upgrades to the next Office. There's only one problem with this vision: I haven't found many enterprise customers who are anxious to turn over their IT budgets to these two companies," said Neal Hill, senior vice president of corporate development at Cognos, Ottawa.

So the business intelligence powers have their game faces on. They stress that corporations need a solution that is truly heterogeneous, linking into all data sources, to gain the all-important "full version of the truth" that vendors wed to their own applications can't provide.