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Microsoft Should Acquire SAP, Not Yahoo
Reservoir Hill writes "Randall Stross has an insightful article in the NY Times that says that if Microsoft thinks this is the right time to try a major acquisition on a scale it has never tried before, it should pursue not Yahoo but SAP, another major player in business software, thus merging Microsoft's strength with that of another. This is more likely to produce a happy outcome than yoking two ailing businesses, Yahoo's and Microsoft's own online offerings, and hoping for a miracle. Stross points to Oracle as a company whose acquisition strategy has picked up key products and customers while avoiding venturing too far from its core business, or overpaying. Stross recommends that Microsoft acquire SAP and leave it alone as an autonomous division — which would avoid a culture-clash integration fiasco. Besides, large enterprise customers are arguably the best customers a software company can have. A few dozen well-paying Fortune 500 customers may actually be more valuable than tens of millions of Web e-mail 'customers' who pay nothing for the service and whose attention is not highly valued by online advertisers."
The article is looking at things totally from the wrong point of view - it's as if they believe that Microsoft's problem is that it has a huge pile of cash & don't know what to do with it.
It's not. Microsoft's problem is Google. Google are eating them in the only arena where you can make serious money on the web (ad brokerage) and doing things to threaten MS's monopoly elsewhere (Google Apps, Photoshop on linux, Webmail, etc)
The Yahoo purchase might not be a solution to this problem, but a SAP purchase sure as hell won't be.
(and frankly, I can't imagine SAP's websphere/java using userbase being enthused with the next SAP release being C# only)
There are shills on slashdot. Apparently, I'm one of them.
IBM. It would make them really unstoppable.
Maybe it will SAP their will to live.
"Trademarks are the heraldry of the new feudalism."
SAP is already a nightmare, I can't imagine Microsoft expending serious efforts to roll it into the Windows Server platform. It'd be like watching a thousand train wrecks, again and again...
512 MB RAM, 20 GB disk, 200 GB transfer, five datacenters. $19.95/month.
SAP isn't so much a finished application as a license for the vendor to bleed you dry with "special" modules supposedly tailored to your business. In one way, Microsoft software doesn't fit that model (i.e. SAP isn't just a shrink wrapped product like Office). In another way, the endless bleeding of your tech dollars while your practices are changed to match the (in)capabilities of SAP would suit their revenue requirements perfectly. The real problem is that SAP is probably too labour intensive for a company like Microsoft.
Instead of paying dividends or buying back stock, let's overpay for companies and enrich investment bankers.
If the time is right for Microsoft to ruin some big corporation by buying it out, why doesn't it just by out Microsoft, it's only real competition. That's how life is for a monopoly.
Really, Microsoft's problem is that it's too big and doesn't do anything interesting on its own. Helping it buy some other huge corp is going in exactly the wrong direction. Microsoft should be spitting up, not borging yet another corp out of business.
--
make install -not war
MS has failed dismally with its various acquisitions, with very few exceptions. MS core money makers are OS and Office. They seem to be putting very little energy into Vista and fixing its problems, doing something which would make their core business sound. In fact it looks like they've just cut these adrift.
If Google had not emerged as the new obsession, they'd still be aiming for Apple with knock-off interfaces, Zune etc.
This is reaaly the MS tradgedy: instead of being customer focussed and delivering new exciting products and technologies (something such an organisation should be able to do with their huge resources), they have become competition focussed.
Engineering is the art of compromise.
Google is going to kill MS unless MS can stop them. Keep in mind that MS has NEVER been customer focused. They have been about aquiring an edge. Well, they have one with their monopoly. And Google combined with OSS is likely to break it apart. In fact, I think that they are going to do what W. and even the EU has not done.
I prefer the "u" in honour as it seems to be missing these days.
SAP actually works most of the time and does so quite well. The fact that there are not a million 'experts' with the papers to prove it is a benefit for SAP.
Anybody want my mod points?
Many people don't realize that MS already has a business Strategy for ERP systems. They've bought several small to large system. Navision, Great Plains, Axapta, Solomons. They have built in house CRM system and they are creating the Dynamics Product. Getting TOP 500 customers doesn't make sense for MS. They have already spent their money and won't change or grow. It's the small-mid businesses that will be growing and MS will be right there providing them with the right software. MS already considered buying SAP 6 or 7 years ago and the culture clash and business model did not fit MS goal, which is every business to run on their ERP system.
Wrong platform: SAP runs on all sorts of platforms. Short of gutting the customer base there's no way they'll ever push platform support purely onto a windows platform. If they don't make that change though, then you'll have a mircrosoft division (SAP) selling you a product that runs on a combination of Solaris and Oracle. Talk about a non starter.
Wrong business model: SAP is a platform, meaning you buy it and then spend millions of dollars and years of consulting to "customize" it to your organization's needs. It's about as far from shrink wrap as you can get. Microsoft has virtually no experience in this kind of enterprise software market.
Wrong culture: SAP is about as germanic as a firm can be and, in their own way, every bit as committed to global domination as Microsoft is (albeit in a different market space). Trying to integrate the two firms, even into a loose confederation like, say, GE or Mitsubishi, and expecting anything other than all out, internal, bureaucratic warfare is willful ignorance (or gross stupidity).
Microsoft and SAP already looked at a merger and realized it would never work. This has already come and gone a couple of years ago.
The article is very likely right, but I don't see it happening, because what drives Microsoft is not so much profit as control and being seen as top dog in the computer world. Even if it proved even more profitable than their current business, MS would not be happy ceding its dominant position in the personal computer world and becoming a backstage purveyor of business software and services. MS would be obsessed with Google even if there were no threat from network applications because Google has been much more successful in an arena visible to the average person.
Microsoft already has an SAP-like product line: Microsoft Dynamics. It's a better product built by a European company that MS bought out a few years ago. Why would MS buy SAP if they already have something better?
Higher Logics: where programming meets science.
MS already have very strong business units dealing with large organisations and combining with SAP could potentially strengthen both parties by providing more vomplete solutions, one stop shopping & service etc.
By comparison, the yahoo thing is a wtf. Both MS and Yahoo are on the downward direction in click ads and online services and combining sums the numbers but does not improve the trend (ie downward + downward is still downward).
About the only thing that yahoo really seems to have is a reasonably sound base in yahoo groups. Moving a group is painful, so existing groups won't move to google groups just for fun. New groups are another matter, with google groups being far more appealing.
SAP does make more sense than Yahoo, but is it enough?
Engineering is the art of compromise.
Microsoft and SAP. A marrage made in heaven!
SAP isn't the performance king, and requires the largest memory footprint of any application I have ever heard of. ( beats Battlefield 1942 hands down! )
and Vista, the OS, that has the largest footprint of any OS outside of z0S9 1.1
Clearly, there needs to be more Vista support for SAP,
I mean, dear god, whereare all those 16GB ram chips going to go?
That way, they'll have most of the shit I desperately want to avoid in one spot.
I think SAP is a poor fit. Yahoo fits Microsoft's needs. Microsoft wants to further entrench user lock-in to their company. Buying SAP gets them more income directly, perhaps, but that money coming from big companies who can demand flexibility or hire IBM and go open source if need be. What Microsoft wants is to get their claws into more users' online services, which can be tied to Windows and MS specific protocols and formats. Their greatest fear is that the Web will allow other companies to supply al a user's basic needs via the browser, meaning those users can buy a Linux box or an OS X box or a Solaris box or an iPhone or a Blackberry or anything that is not Windows.
MS doesn't need more revenue. Their users will continue to pay because they have no choice. MS has their data and their networks locked up and the expense of switching is too high. MS doesn't want Yahoo to get more revenue. Almost all Yahoo users are Windows users and MS already collects their tithes. MS wants Yahoo to make sure Yahoo users are not given a choice of migrating to being Yahoo/Linux users or Yahoo/MacOS users instead of Yahoo/Windows users. Further they want the lion's share of the market so that most people are locked in. Right now, between Google and Yahoo, most users are not locked in for their mail and messaging and calendaring and in a short time, perhaps their office suite and IM and internet phone and internet TV and whatever else becomes a Web service. If they have most users then they can use that to break compatibility with Google and so Google will have to waste time, effort, and money trying to reverse engineer all of their proprietary apps, to the point of having to screen scrape to get data back to an open and usable format (which they already had had to do to some degree).
In summary, MS wants to buy people so they can use their normal tactics instead of competing to create a better product. If they were interested in making money on their acquisitions they would not have bought dozens of game companies and created the XBox. They want a presence in the living room so they can lock in people even more. Once they have lock-in they can take all the money they wish from people for perpetual upgrades and fees, so long as they make the pain of getting away from them greater than the cost at any given time.
They're already an industry-leading, publicly traded company. Microsoft sure isn't going to increase their market share, and they have nothing at all to offer SAP in the way of technical or management skills.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
SAP is bad enough without a bunch of Microsoft crap thrown on top of it... Seriously. SAP = crap.
OSX pwns.
and Hollywood!
How many people here have actually worked at a company that went bankrupt trying to implement SAP "solutions"?
expandfairuse.org
Microsoft sees others' pastures are greener and wants a piece of it, thats all.
the excellent developer tools from Yahoo like YUI and their excellent developer website ?
Will it all be crushed by MS ?
I have the beginning of a theory for Microsoft's attempts to eat Yahoo. The Redmund Giant could buy out SAP instead to boost their strength in business software, but Microsoft believes that they are top dog in the business world already, and would like to expand their business into other areas instead (online services in this case). If Microsoft tried to buy Google, the DOJ would immediately throw an antitrust-related tantrum and put an end to the deal. However, gobbling up the search giant of the pre-Google era (Yahoo) is much less likely to raise enough red flags to block the deal, and Microsoft will have acquired the experienced people they need to develop the kind of web-based software that they need if they ever hope to compete with the likes of Google.
Microsoft should fly to the moon, install a giant "laser," and use it to blow up Google HQ.
That is just gross.
Mountain Dew and Doritos. EVERYWHERE!
Wow I was really surprised the author didn't notice the obvious here. MS already owns about as much of the software industry as they legally can. For them buying another software company is just plain stupid. Not only do they risk more monopoly accusations and a potential company split, but it ties them in even closer to the software market when they need to diversify. As a business MS knows it needs to diversify itself to ensure it can survive in a market where things change quick. Five years ago if the software industry would of fallen out then so would of MS, but 5 years from now you won't be able to say the same thing. MS is investing into several diverse up and coming markets just like any smart company would. This is why we see the xbox, and the zune which are two of MS's major "non-software" products. As far as the web MS has repeatedly failed to catch up to google mostly because google spends it's funds a bit wiser than MS. I say this because google buys companies that are going to make it big (ie youtube.com), while MS has focused on web companies that are already pretty huge (yahoo, hotmail, and facebook). I think if MS wants to make a splash on the web it's going to have to take a few risks on some companies that haven't quite made it yet. My recommendation would be Pandora.com which is a pretty successful "net radio" site that creates custom channels according to your musical tastes. This little website is amazing for those that listen to music at work, or are too cheap/lazy to get a decent music collection. Of course this is just 1 of 100's of potential web sites that will be the next yahoo, google, myspace, facebook, and youtube.
SAP's current strengths are the large array of business partners and its business model of platform independence. Sometimes, it is a bit mind-boggling going through their support site and seeing all of the options you have for running some of their applications. Some people would call that complexity, others would call it flexibility. This flexibility, if Microsoft were to purchase SAP, would definitely go away. There is a litany of services/vendors that Microsoft has trouble converting (or has totally destroyed) when trying to assimilate them into their corporate culture. I fear this is what would happen with either a Yahoo or SAP purchase.
What do you think is going to happen when Microsoft takes its attitude of 'only on a Microsoft platform' and extends it, as they've had, with the SAP platform? A lot of angry customers, most sworn to never run core business components on a Microsoft platform. I'm sure that analysts would suggest that Microsoft keep their hands off of an SAP purchase (if it went through altogether); but the temptation would be too great.
Microsoft should focus on spending their money in making their customers happy in their current core competencies; make Windows Vista and Office the products people should be happy about using. Right now, they are the products most of the people I know are stuck with using. I'm at a loss as to why Microsoft obsesses with Google or SAP or Yahoo for that matter; I know they need to stay competitive, but I'm not convinced they are the leading innovators in their current field.
Okay, I understand that MS is hurting and they need to do something. My answer is MS research. You have the development labs. You have the cool ideas. Use them. INNOVATE DAMMIT. Google didn't get to this point by the standard merger philosophy. MS, you didn't get to where you are by stupid mergers and desperate acts. You got there by providing something that people wanted, in a better manner or for cheaper. Keep doing it. PUSH the boundaries of what you're doing. Yeah, it's higher risk. But the reward is higher. You get the revenue, the soft benefit of everyone loving your company vs everyone hating it. You'll avoid the monopoly claims because you won't be a monopoly. The only downside is higher risk. You have the cash to offset that. Use it.
Cool. Now I can add the Borg Gates to my bumper sticker design: "SAP eats babies." (TOTALLY trademarked, steal it and die...)
My current employer is a dominant player in our field, in a smallish country, that sells about a billion dollars of $stuff a year to 10,000 or so customers.
:)
Our $30m+ competition for a new ERP system came down to SAP vs Microsoft.
SAP gave us 50 reference companies of similar size in similar industries, 5 of them in the same country as us, 3 of whom let us visit on site and grill them about their setups.
Microsoft gave us one reference company smaller than us in our country AT ALL, and one company in the US in a similar industry, but 10 times smaller than us.
We got the distinct impression that we would be pretty much the largest deployment EVER of Microsoft Business Apps in an industry similar to ours, by an order or magnitude.
SAP won, of course.
Microsoft has a horrid bootstrapping problem. Until they build up experience and a userbase that people like us can go visit and actually SEE their stuff working, they're going to struggle to be competitive.
The other big plus for SAP was their upgrade attitude "We understand that most of our customers want to upgrade their core ERP around every 8-12 years, on a Saturday afternoon"
Why did they have to withdraw it? http://slashdot.org/article.pl?sid=08/02/21/1526225&from=rss
Is this what 5 years and $5bn gets you in a monstorous company like MS?
Engineering is the art of compromise.
1) Knock down their own share price by announcing ridiculous hostile takeovers of companies that will never agree to it.
2) Buy back Microsoft stock on the (relatively) cheap
3) Profit!
Well, OK, the math isn't all that impressive, but slowly taking the company private through stock buybacks is considerably more sane than most other suggestions of what to do with their cash horde. If you ignore the huge chunks of stock controlled by Gates and a few other early owners it looks more plausible. Effectively going private over time by getting rid of the public stockholders would give Microsoft the ability to take more risks. Paying dividends to employee-owners is a much better model than handing out stock options now that the dot bomb insanity has wound down. (It's late, hopefully that's coherent...)
SAP supports how many various platforms? how many databases? Their sole beloved language of ABAP? Half the SAP development team would quit because they've done nothing but code ABAP their whole lives. SAP does /not/ support Java internally or technically despite their marketing push otherwise, BTW.
Yes, a disastrous combination MS & SAP would make. Sounds good but they'd be in code refactor for a decade, and loose customer base while at it.
I would tag it "wtfissap" .
Copyright infringement is "piracy" in the same way DRM is "consumer rape"
this /. article is a headline article on google news at this moment. wauw!
Isn't SAP already owned by Oracle?
As if people don't have enough reasons to hate them, Microsoft has to go and buy "The Nazi Spreadsheet From Hell". Truly the most "Procrustean" software ever. I last had to use SAP 4 years ago and I still have the shakes.
the Alan Parsons Project!
or,
Stupid Ass Project
or,
Sucks Away Profits.
SAP is the biggest piece of shit program I've ever had the opportunity to work with.
They want to f***ing kill Google !!
MY PRECISSSOUUSS VISTA !!!
And again, I wander why this too is scored +5 "funny" /. gone weird..
I agree, Google apps don't have the full feature set of desktop office software. But it is a way better for shared document editing than MS Office. Granted, I've never really seen Sharepoint used to it's best, so maybe that's not entirely true if you have the full MS kit setup.
If you have a group of people who need to work on a simple spreadsheet together to collect data (e.g. mailing addresses), a Google spreadsheet is perfect. Reasonably easy to learn, and excellent maintainability.
For some tasks, online document editors are going to dominate. For a shrinking portion of tasks, the desktop software will rule. Just like the old days, web mail did not exist. Today, for many (most?) people I would only recommend web mail.
Not everyone is a Slashdot level computer user...
If you mod me down, I shall become more powerful than you could possibly imagine.
When the Net first was made global by our penny munchers a Minute at Time Warner's AOL.. The net was a un-cruel world, an full of potential.. Time marched on an the Internet Became Grossly populated, an very hostile.. At first there was "geek" law.. Which a regular hacker would only snoop an look around.. Without the cultivation of tormenting virus' at a click's content.. Crackers, which evolved from that users getting online slapping run-times on sites that would install worms or virus that open ports came in the later years, which known they were considered Cracker, and not hackers.
As spam grew to where its popularity made all Web-browsers(Netscape, Opera, Internet Explorer) to have embedded pop-up blockers and sniffers applied to its buffer cacheing.. The Law started to step in.. Which was at first "geek" law.. Has become black an white bills' of law in congress.. Now the Net is a constant filter which Yahoo! has became very popular with great trends, as Microsoft wants they're name under their name cause of how secure Yahoo! manages to run, by blocking forge-lent sites as well as phishing sites from users eyes an browsers temp caching..
Yahoo!, as well as many other public sites that takes a large amount of users By Law have to condone a specific privacy statement, just because of all the prowling, internet stalking, and virus trends that are on the net today..
So basically its not a matter of Yahoo! being at fault.. It is the ones who miss used all the open source tech that helps aid learning an programming trends to prosper, the people who made forge-lint sites, an made gimmicks on trying to stalk users for they're confidential information.. It is those who had made every publicly used site to hold theses privacy statements.. Such as Myspace, Google, MSN, ICQ, and AOL hold the same exact privacy measures.. To keep all the Net users safe an secure, and out of reach of the internet terrorist that game for peoples confidential information..
So don't blame Yahoo! blame the people who take they're whole time on the net to Spam..
Worse, if you blow 'em up to get 'em off the beach, you just get tiny bits of rotten whale raining from the sky. What not to do with a beached whale.
If you mod me down, I shall become more powerful than you could possibly imagine.
In the words of Michael Dell in reference to Apple once, Microsoft should close up shop and hand the money back to their investors.
What relevance does Microsoft truly have these days? The OS? There are better offerings from Apple and Linux (not to mention higher-end stuff from IBM and Sun). Productivity suite? OpenOffice does the job nicely, along with a bunch of others. Database? MySQL, IBM and Oracle are all you need. Programming & Web? Nothing wrong with LAMP/Java/Eclipse. Media & mobile? Sorry, my bias is with Apple here. The combination of iTunes/iPod/iPhone/AirTunes/Airport/Apple TV/QuickTime-MPEG-4 etc, is rock solid and unbeatable.
Can you imagine the innovation wave that would follow a Microsoft collapse? Such are the stuff of dreams.
actually I work a lot with business students, and (at least in academic circles in Vienna) it's different (from my POV): most people ask me, if I boot my laptop in front of them*, if I am using that "ubuntu thing". Some of them never heard linux before, or just read it somewhere as a word. but many more seem to know ubuntu!
;)
I also have to do with a lot of students from the states, or different countries (since vienna business school is one major destination for most exchange students in the business sector) and I also experienced this a lot with them.
It was a topic not long ago with colleagues, and they shared the same experience. we were all together puzzled about this phenomenon.
my conclusion: ubuntu is in fact a very well known word in the world. also mostly for non-linux-users. and I thought otherwise. maybe it is only the experience we had from other words (alongsided with some disappointment) like linux, which leads us to the conclusion, that nobody knows "this or that", so we might not emphasize the true spreading of some special vocabulary
it is however of course not that famous as google.
and of course we will never know for sure, but somebody feel free to make a study about it, it is a good theme for a diploma
*) Yeah, posing in a nerd stylish way of course.
Microsoft has gotten used to being the one dominant player in the computer industry. Well, times are changing, and there are other big players. They can't dictate everything anymore and they can't do everything anymore. They need to find profitable niches, not world domination.
for apparently the latter strategy is not working.
Read radical news here
Comment removed based on user account deletion
I think that if its any buying from SAP and/or MS would be SAP buying Oracle.
Or Oracle buys SAP.
Microsoft in the BPM/ERP/SOA/Java buzzwords is nothing but a joke.
Now, on the other side, Microsoft isnt done in trying to buy Yahoo.
SAP is a German company. Microsoft is already in enough trouble in Europe.
Also, most of SAP's large stakeholders are SAP customers, and few of the large installations are on Windows/MSSQL. Most large implementations are on some flavor of Unix, Oracle, DB2, or mainframe. That's not saying that there aren't some major installations on Windows/MSSQL, but with Microsoft's history of lock-in, and with the extremely low speed at which implementations occur, there's no way in hell these customers (who all have a lot more money and pull than MicroSoft) are going to allow vendor lock-in at the OS/DB level.
-- lk t lv ll th vwls t f wrds. T svs lts f tm t wrt bt ts pn n th ss t rd nd mks m lk lk cmplt dpsht.
Do MS buy up a bunch of Yahoos, which suits my opinion of their company already...
They both seem to fit quite well
Enjoy Y2K? Roll-on Year 2037!
Google would buy SAP and then make it usable.
One of our competitors trademarked the term "hypothesis". From now on, we will call them "boneheaded ideas".
Macromedia was a perfect acquisition, and for some unknown reason, Microsoft thought about it then failed to pull the trigger. Imagine full integration between Visual Studio and Dreamweaver/Flash/Fireworks. That would have been something to get excited about.
Add Gentoo and you get my vote.
Sometimes the grim truth can be funny
Does the Microsoft-Yahoo deal remind anyone else of Rupert Murdoch's acquisition of MySpace?
On the web, infrastructure counts for very little; what matters most is mindshare. Yahoo were historically "equals" with Google - both started at a similar time as small organisations offering a similar service - and in fact Yahoo had a head start IIRC, but Google grew to lead the pack because people liked their site better. Sure, you could argue that their search processes were technically superior, but 99% of internet users don't know and hardly care as long as they can find a cake recipe when they want one.
So the fact that Yahoo is an established corporation doesn't mean all that much. If people keep drifting away to Google there's not a lot they can do - you can't offer discounts on a free service.
That means the main value Microsoft gets from buying Yahoo is Yahoo's traffic. Sounds ok. But that's roughly what Murdoch was trying to get at when he bought MySpace, and, well... I haven't seen MySpace's traffic recently, but when was the last time you heard someone mention MySpace instead of Facebook?
I don't think Yahoo will be gaining ground on Google any time soon, no matter who's backing them.