The Wall Street Journal published an article Tuesday (after the market close), where Microsoft (MSFT) and SAP (SAP) would expand their existing partnership and team up to compete against Oracle (ORCL).
In the article it states that Microsoft will name the German software maker the “preferred provider” to its customers of software for budgeting, planning and forecasting.
Oracle is SAP’s biggest rival for business application software and Microsoft’s biggest rival for database software so by working together they are teaming up to hit Oracle hard on both fronts.
The article also states that under the arrangement SAP and Microsoft will make joint sales calls and appear at events together and they’ll also take steps to ensure that products from the two companies work well together.
This is a very big deal for both companies and should really create some problems for Oracle. The deal is an example of a new strategy by Microsoft to partner up with smaller competitors, to go after the industry leaders. This deal to use SAP to go after Oracle is very similar to Microsoft's partnership with Yahoo (YHOO) to go after Google (GOOG), but in this case it is a major coup for SAP, while the Yahoo deal was a major coup for Microsoft.
As a shareholder in both Microsoft and SAP I couldn't be happier with this new arrangement and would not be surprised if Microsoft where to someday buy out SAP, if they could ever figure out how to get the deal through regulators.
This is a win-win as far as I am concerned.
Disclosure: Long MSFT, SAP. No Position in ORCL, YHOO
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