Microsoft and business software giant SAP on Wednesday announced a wide-ranging agreement to integrate their products using Web services.
The deal, which calls for better links between Microsoft's .Net development software and SAP's NetWeaver integration server, could help big companies more easily tie their SAP business applications to Microsoft Office and other Windows-based software, Microsoft executives said.
The agreement came at SAP's Sapphire user conference in New Orleans on Wednesday. It extends an existing 10-year partnership between the companies, but deepens the technical integration between their products. Microsoft and SAP will now cross-license their intellectual property and participate in cross-marketing and sales calls. In addition, Microsoft's tools can now be used to build extensions to SAP's software.
The deal should help both companies, an analyst said. "This lets SAP leverage the Microsoft development community to build SAP applications, which hasn't been that easy in the past because of proprietary interfaces," said Ron Schmelzer, an analyst with ZapThink. For Microsoft, the deal helps the company gain entry into large enterprise deals to sell additional software, Schmelzer said.
Tighter bonds between Microsoft and SAP could cut into the market for third-party integration software from WebMethods and other companies, Schmelzer said, since those products won't be as necessary as a result of the deal. Officials from WebMethods were not immediately available to comment.
The deal underscores that the relationship between the companies has taken on greater importance as an increasing number of businesses deploy SAP's software on Windows-based servers. The companies estimate that there are more than 40,000 SAP installations on Windows server software, and that two-thirds of all new installations of SAP are on Windows. SAP's software also runs on Unix and other operating systems.
Microsoft executives are also quick to point out that the deal is a high-level endorsement of Web services technology, which has been a centrepiece of Microsoft's strategy for the past four years. Some analysts have said that big companies have been reluctant to use Web services as a key part of their most important business systems until software makers fully support the technology in their products.
"If there was any doubt at all that Web services were going to be at the centre of enterprise applications, this announcement removes that," Eric Rudder, the senior vice president in charge of Microsoft's Server and Tools business unit, told CNET News.com. "Seeing the next wave of applications embrace these standards is a huge step toward getting them in use."
