SAP and Microsoft

Two software leaders SAP and Microsoft, are slowly reentering the On-demand marketplace. These two software giants have not targeted the early adopters in the Gartner Hype cycle, and usually have enter the field later than most other cutting edge ISVs. Consequently, they have used their deeper pockets and other resources to steadily erode marketshare of other incumbents in the field.

Also, while SAP has provided some limited resources to open source projects like SAPdb, and Microsoft may be forced to license its software in the EU, both companies have largely eschewed open-source and continue to rely on traditional software business models.

Both companies a strong partner program to complementors (ISVs, distributors, systems integrators and Value added resellers) significant incentives to partner.

Are they competitors or do they complement each other?

Currently, SAP and Microsoft products largely complement each other. SAP and Microsoft are also collaborating in Mendocino to integrate back-office ERP with front-office Microsoft Office products, possibly using .Net and NetWeaver.

However, Microsoft, with its newly renamed Dynamics products is targeting the small and medium business (SMB) ERP markets, the same market that SAP is increasingly focused on to increase its growth.

We will know in the next few months whether the Dynamics products start gaining traction in the marketplace or whether a the product requires a lot more than a new name to be successful.