Microsoft planned SAP takeover

Talks between the two companies, which ended earlier this year, were revealed during Oracle’s appeal against the US Department of Justice decision to block its hostile bid for PeopleSoft.

‘A joint Microsoft/SAP would have absolutely dominated software spending by large enterprises,’ said Philip Carnelley, research director at Ovum, in a statement.

‘However, the technical, organisational and cultural obstacles would have been formidable. We wonder what the regulators would have made of this too. We are not surprised that it soon became clear that the idea was a non-starter.’

But Carnelley gave a stark warning that Microsoft’s interest in SAP showed that no company was safe from a possible acquisition.

‘Clearly (Microsoft) is prepared to think big and consider using large parts of its cash pile. No-one is safe,’ he said.

‘Overall, this says more about Microsoft’s intentions and the need for regulators to get a firm grip on the software industry.’

Bruce Richardson, an analyst at AMR Research, also believes that regulators would have been forced to act.

‘While interesting, a Microsoft and SAP combination would have a hard time making it past legal hurdles in the US and Europe,’ he said. ‘Oracle merging with PeopleSoft would be minuscule next to the mammoth Microsoft/SAP combination.’

Meanwhile, Microsoft is continuing its battles with regulators in Europe.

The software firm has now filed its appeal against the European Commission ruling in March that it violated anti-trust law.

The ruling was accompanied by a fine of EUR497m, a demand that Microsoft make available a version of its Windows software without Windows Media Player and provide more technical information to competitors.

The company was given 120 days to do this, and 90 days to offer extra technical information. The 90 days expires in about two weeks.