Microsoft and SAP forge business software joint venture

Microsoft and SAP, the world's leading software companies that held abortive merger talks last year, announced plans for a new joint product initiative yesterday that will tighten their grip on the business software market.

Microsoft and SAP, the world's leading software companies that held abortive merger talks last year, announced plans for a new joint product initiative yesterday that will tighten their grip on the business software market.

Code-named "Mendocino", the initiative will see SAP's business process applications connected directly with Microsoft Office.

The new partnership will see the two companies agree to sell each other's software, which is already ubiquitous in companies around the world. Although SAP and Microsoft have worked closely before to make their systems compatible, this is the first software product to be developed and launched jointly by them.

The new tie-up will make their applications even more powerful and difficult to compete against by the likes of Oracle and IBM.

As an example of how the two companies' software will be stitched together, SAP's human resources software will be able to talk directly to Microsoft's Outlook application so that holidays can be scheduled simultaneously in an Outlook calendar and in the human resources system.

There are numerous other efficiency gains, according to the company, that will help businesses make their operations run more efficiently.

"The new product is slated for availability to select customers for early access in the fourth quarter of 2005," a joint statement from the software companies said.

"Mendocino is designed to integrate SAP processes - such as time management, budget monitoring, organisational management and travel and expense management - directly with Microsoft Office," said the companies.

Jeff Rikes, a group vice president for Microsoft, said: "Today it's too difficult for information workers to access the business information they need to make effective and efficient business decisions. This product will go far to address this issue. Mendocino allows us to deliver more value to the many customers who use Microsoft and SAP products today and promises to put the power of enterprise systems at the fingertips of every information worker."