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Sunday, February 24, 2008

Microsoft Needs A New Mojo

Just arrived back in the valley after a short international tour, to see this NYTIMES note suggesting that Microsoft should look at SAP for a buy-out.
The reasoning : Microsoft does business software well. Approximately half its revenue comes from business customers for its e-mail infrastructure, database systems, developer tools, Office productivity applications and other mainstays. It has also assembled, through acquisitions, a fledgling line of enterprise software that it calls Microsoft Dynamics. Microsoft would like Dynamics to be viewed as competing head to head with the No. 2 name in enterprise software, Oracle, or the No. 1, SAP of Germany. For the moment, however, Microsoft Dynamics’ parity with those big names is nothing more than wishful aspiration.

Me think not.
Reason : Laggards coming together to create another monster.. The very purpose of Microsoft wooing yahoo is because, MSFT is concerned with losing it's desktop dominance to web based application and needing to protect it's domain there. I am also not an enthusiastic supporter of consolidation of enteprise software.The earlier reasoning for looking at SAP was clearly aimed at a few large customers but to straddle them in the enterprise space. When years back , Microsoft mulled a potential acquisition of SAP, the expectation was that Microsoft would a leadership position in back-office applications among the Fortune 500. Information published then gave some perspective. The documents released in the case, which can be downloaded here, include a PowerPoint presentation dated Jan. 5, 2004, in which Microsoft outlined its rationale for buying SAP- without doubt a costly proposition ( that time the price expectation was in excess of 50 billion USD), With SAP, Microsoft saw the chance to strengthen its relationships with multinational companies and computer services firms, and the opportunity to promote its Windows products among SAP's 20,000 customers. The document, marked highly confidential, uses an elaborate set of code names, referring to SAP as "Sagittarius," Oracle as "Ophiuchus," PeopleSoft as "Pegasus," and Microsoft as "Mensa." So what’s the solution for MSFT – Money can give it a limited upside – rejigging their DNA to be more open, innovative and a winning attitude in all things that it enters could be the key. They can however look at a small scale pointed acquisition like salesforce.com to create new avenues of entperprise business. Why not start now and try again on Search, Mobile infrastructure and Ads – who knows – history renewed /relaunched product launches have created history in the business world in the past – it’s a tough, rough and a long road ahead – it’s worth travelling. Microsoft needs only one strategy now -thats the strategy of fast and flawless execution.

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