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4/21/2009
02:39 PM
Bob Evans
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Is IBM Looking To Acquire SAP To Match Oracle/Sun?

Facing the prospect of all-Oracle stacks featuring Sun servers running Solaris OS on top of an Oracle database with all reporting through Hyperion, IBM might be considering a bid for SAP, a securities analyst speculates. He even cites a 2006 comment from SAP co-founder Hasso Plattner that only three companies would make ideal matches for SAP: Google, Microsoft, and IBM.

Facing the prospect of all-Oracle stacks featuring Sun servers running Solaris OS on top of an Oracle database with all reporting through Hyperion, IBM might be considering a bid for SAP, a securities analyst speculates. He even cites a 2006 comment from SAP co-founder Hasso Plattner that only three companies would make ideal matches for SAP: Google, Microsoft, and IBM.Writes Barrons blogger Eric Savitz:

Patrick Walravens, an analyst with JMP Securities, proposes a whopper: He thinks Oracle's move to acquire Sun could make IBM itchy to move into the applications software business "in a big way." How? By going after SAP.

Savitz then quotes from Walravens' research note:

IBM's software business has traditionally stayed away from the application layer, but it essentially has all the tools underneath the application layer. It has database technologies in the form of DB2 and Informix, it clearly has middleware, and it has a strong business intelligence solution having acquired Cognos. Just as Oracle is actively converting PeopleSoft, J.D. Edwards, and Siebel customers to the Oracle stack, if IBM bought SAP it could try to move SAP customers to its stack.

Well, Microsoft took a run at SAP a few years ago and that didn't work out, and Google doesn't seem to be interested in the the enterprise-application market. So by Plattner's reckoning in 2006, only IBM remains as a viable suitor -- and IBM's latest financial results show that software and services continue to make up larger proportions of the company's total revenue.

As my colleague Paul McDougall reported earlier today, the hardware sector was not kind to IBM in its most recent quarter:

Big Blue's report showed that the market for servers and other types of computing hardware in which Sun specializes has dried up across the board amid the recession.

IBM reported that System Z mainframe sales dropped 19% year-over-year, while sales of commodity-style System X servers plunged 27%. Midrange System p servers, which run the Linux and AIX operating systems, declined 2%. Overall, IBM's Systems and Technology Group reported a 23% drop in sales, to $3.2 billion.

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