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-Feb. 13, 2007

 
 

Is an IBM and SAP Marriage in the Works?

 
 

SCDigest Editorial Staff

 
 

The Street.com’s commentator Doug Kass wrote late last week that there were strong rumors right now around Wall Street of merger talks between IBM and software giant SAP.

These are just rumors, to be sure, and have been circulating at some level for almost a year.

SAP has strongly denied the rumors during that time, though chairman Hasso Plattner unintentionally put some fuel in the fire last May by saying to the German Financial Times last year that: “There are only three potential buyers [of SAP]: IBM, Microsoft and Google. Of all companies, I don’t see anyone else. If shareholders think that a combination, and not independence, is better, then it will happen.”

IBM is looking for new growth opportunities, while SAP stock price has recently lagged as it sees its own growth slowing, largely due to its increasingly large ERP market share that limits further growth potential.

IBM and SAP have an existing partnership to bring ERP to the small and mid-sized company market. Penetrating these smaller companies has been a key marketing goal of SAP for the past few years.

 
     
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