Microsoft-SAP?

Microsoft should buy SAP. So counsels MIT Professor Michael A. Cusumano. Forget Yahoo! Be like Larry and buy deeper into enterprise software.

Larry Dignan at ZDNet talks about challenges like EU approval around such a transaction.

My question is more basic. As I have asked before why are we in such a hurry to consolidate software?  In the last 15 years, there have been 200+ enterprise software acquisitions done by Oracle, IBM, CA, HP, Microsoft, Infor and Sage.

How have buyers benefited from this? Where are the volume discounts as contracts get consolidated, SG&A gets squeezed, products get rationalized, customer service gets streamlined...the promises that industry M&A makes to a CIO?

Microsoft has still not finished rationalizing its earlier enterprise application acquisitions - Great Plains et al. Why do we think it will digest SAP any easier? SAP and Microsoft have been collaborating on Duet for years now. Gives you an inkling into the likely productivity and innovation likely to come from a combination of those two

If money is burning a hole at Microsoft and Yahoo! gets away, I would like to suggest better uses of the funds. No, not another investor dividend. They have already got over $ 100 billion over the last few years.

Fix Vista.  Invest much more in various existing enterprise products from SQLServer to virtualization.

And lower maintenance to enterprise customers. Somehow, I have the feeling they could put that dividend towards far better innovation projects.

Comments

[Krishna]

The promises that large enterprises make to a CIO is merely an extract from what is filed before the SEC for passing anti-trust scrutiny. Customers to interpret at their own risk!

For you customers, Volume discounts mean your choices have shrunk, so buy more from us; we `may’ offer some discount. SG&A getting squeezed means we will use the same channels to upsell an expanded portfolio, to help absorb our fixed costs better; don’t read that as better customer service thro increased outlets - no gains to you. Products get rationalized mean cannibalization; no more multiple choices. Period. Customer hardly figures anywhere. The focus is more on reduction in choice for customer so that we can keep on gouging. Isn’t life simple, that way?

It is what I call as MSS (McKinsey survival strategy) at work. [MSS= when a large diversified client consults McKinsey, it advises them to break up. If the client is a highly fragmented entity, the solution is to consolidate. In alternating between the two ready-template solutions, firms like McKinsey carved a haloed existence for themselves. They have no accountablility to the end user anyway because that is a creep called customer and not their fee paying client.)

[Jack]

I hope Yahoo doesn't get away

[Microsoft Windows XP]

Microsoft should invest more time in Vista. It is mostly about the looks and not much about the performance. If it had the same amount of performance it has with looks, it would be the best OS in the world!

But Yahoo gets away... Thats another story. :P