IBM+SAP: Is it Possible? Some Food for Thought...

Of course the easy answer is: yes, of course... anything is possible!

With the big announcement of Oracle acquiring Sun, and jumping now into the hardware business of all things (and in the process helping to broaden its enterprise software stack, as commented on by my colleague Olivier), I began to think: This can't be it! This large of a deal, and its impact and the disruption caused to partners, competitors and market positioning...

SOMEONE ELSE is going to be tempted to do something BIGGER! But who????


Just to a few large IT players:

* HP: Fresh off announcing the HP Oracle Database Machine last year as a co-product with Oracle (a partnership Oracle needed perhaps more than HP!), Mark Hurd has got to be feeling a little bit burnt right now... And while many people try to paint him as dollars and cents, bottom-line focused chief... he's not, he's shown he's ready to move HP into to new spaces with the launch of NeoView in the data warehousing space, as well as to build out their IT services business with EDS. Perhaps HP will have an appetite for something more? Probably not... but who knows...

* Microsoft: Fresh off a -6% revenue decline in its most recent quarter, Microsoft lost its "cool" years ago to Google and Salesfore.com; while their ERP business is not losing ground, it's also not doing much either... acquiring SAP could really bring Microsoft the market they want in the long run, while helping to improve performance across the MS stack... Does this have a shot? Definitely a possibility...

* IBM: Said it wasn't playing in the enterprise application space.... then it bought MRO Software (Enterprise Asset Management), then it bought Cognos (BI & EPM software). Okay, this isn't exactly "enterprise applications" in the same sense as at SAP or Oracle, but getting pretty damn close! SAP was founded by a few ex-IBMers ... if Oracle is going to compete in nearly all fronts with IBM (with the one area of weakness for Oracle being IT services outside of Oracle products), maybe its time for IBM to bring it on in the ERP space!

* SAP: SAP has always preferred the home-grown development of its business than to large acquisitions (ehem... of course except for Business Objects). However, with so many successful (at least in the short-term) and profitable acquisitions performed by their chief rival Oracle... perhaps the company is beginning to feel too narrow? This of course is still a strength, since they are 100% focused on enterprise application (and supporting IT Services), and to the underlying middleware through Netweaver. A merger with IBM on one hand could add huge strengths to its software stack, an in-house hardware platform... and of course IBM Global Services (Did someone say profit issues with Business ByDesign???). Although, the latter could also effectively kill off a lot of collaboration with its other IT services partners... On paper, Microsoft might make the most sense. Not much overlap, a lot of complimentary software offerings... Neither Microsoft or SAP can categorize their SME ERP businesses a "success," yet with the biggest share in the large enterprise ERP space, and a co-product already out there with Duet, a combined SAP+Microsoft could have a better shot within the SME space too...


Again... I will be totally shocked if the current market positions stay as they are. While I list HP, Microsoft and IBM as the most obvious (since they have the cash, size, channels....), I can also throw in Google, Amazon, Cisco.... Dell.... After Oracle+Sun, who knows???

But I tend to think something will happen with my group of 3... why? Because all three want to secure their position to be relevant. Yes, I understand that Microsoft makes +$60 billion/year and HP and IBM bring home +$100 billion/year.... But there is also a whole new wave of computing coming in the form of the cloud; it is affecting all players, and those with the largest positions in "past technologies" tend to be the slowest to move out, as to not kill the "gravy train."

If you still don't believe me... I took a look back into the PAC archives, and I went through our supplier ranking of the top 30 Software & IT services suppliers in the U.S.... just 15 of these companies still make the top 30, or, are even in existence! And we are talking about less than 10 years ago.... imagine what our top 30 will look like in 2020!