A leading Wall Street analyst is predicting that Oracle?s hostile bid for PeopleSoft may be the catalyst to trigger Microsoft into expanding its own business applications portfolio.
Microsoft has already staked its claim to the business applications market with the acquistion of Navision and Great Plains Software as well as the development of its own MS CRM low end offering. But with Oracle now boasting a five year acquisition strategy, some market watchers are convinced that Microsoft will have to open its own wallet if market consolidation sets in.
Goldman, Sachs & Co. analyst Rick Sherlund warned that if SAP and Oracle become the two biggest makers of business-applications software it may impact on Microsoft?s own .Net strategy by winning customers over to two firms that do not back the platform. "If the enterprise applications market is dominated by Oracle and SAP and both are hostile to .Net, then this consolidation is bad for Microsoft," said Sherlund.
But Microsoft faces a dilemma, he warned, as it doesn't want to move to larger customers because it "would further alienate" SAP and Siebel. Such a move would also require Microsoft to overhaul its channel strategy and build a direct sales force.
Simon Edwards, UK country manager for Microsoft Business Solutions, said he could not comment on future acquisition plans for the company, but said that channel conflicts between the traditional Microsoft sales process and those of Navision/Great Plains were being addressed. It was, he said, ?a work in progress?.
Edwards was not impressed by Oracle?s intentions to expand through acquisition. ?It?s an accountant?s strategy,? he said. ?Microsoft bought companies to form the foundation to develop and grow a business applications company.?