By Ben Worthen
As tech companies expand into one another’s turf, rivalries are often created or intensify. So it should come as no surprise to see some deals that can be summed up as the enemy of my enemy is my friend.
SAP and Microsoft, which dominate different segments of the software industry, are set to announce the latest such partnership on Wednesday. Under the agreement, Microsoft will name the German software maker the “preferred provider” to its customers of software for budgeting, planning and forecasting.
The deal extends a longstanding relationship between the two companies, whose past collaborations include software to help their programs work better together. Microsoft even considered making a bid to buy SAP early in the decade.
SAP and Microsoft also have some overlap. For instance, both make software that businesses use to do things like balance the general ledger and manage customer relationships. The other thing that they have in common: an intense dislike of Oracle.
Oracle is SAP’s biggest rival for business application software and Microsoft’s biggest rival for database software. Oracle also makes a budgeting and planning program that competes with the SAP software at the heart of the new partnership.
The Oracle competition seems to trump concerns that working together might give SAP a foot into Microsoft’s accounts. By working together Microsoft and SAP hope that they will better be able to win sales against Oracle—and replace it in some cases, says Sanjay Poonen, an executive at SAP.
Under the arrangement SAP and Microsoft will make joint sales calls and appear at events together, says Poonen. They’ll also take steps to ensure that products from the two companies work well together.
An Oracle spokeswoman declined to comment.