News

Microsoft and Capgemini Ink ERP Partner Deal

• By Kurt Mackie
• 10/09/2009

Microsoft and Capgemini announced a partnership deal on Friday that aims to better integrate Microsoft's software with SAP's enterprise resource planning (ERP) solutions.

The partnership, called "ERP+," centers on the integration of Microsoft Office, SharePoint, Windows phone and other Microsoft applications with SAP's ERP and NetWeaver middleware solutions.

Capgemini will create a Center of Excellence and train 1,000 of its architects on integrating the technologies. The Paris-based consultancy also will develop industry-specific solutions based on SharePoint and the Windows Mobile platform, according to the joint announcement.

"This alliance addresses our customers' need for integration beyond Microsoft .NET and NetWeaver and enables seamless integration that really drives role-based productivity and cost reduction," said Olivier Picard, Capgemini's chief sales officer, in a prepared statement.

The deal also has larger enterprise software competition implications -- in particular, Microsoft's and SAP's competition with Oracle, according to industry analysts.

"Microsoft is trying to come up with new ways to sell its portal and Office productivity products and SAP is a natural platform for Microsoft to capitalize on since both of them [SAP and Microsoft] have a common enemy -- i.e., Oracle," said Albert Pang, research director of enterprise applications at IDC, in an e-mail.

Microsoft and SAP have previously collaborated on Duet, a suite of business process and business intelligence applications that work with SAP systems while retaining "the look and feel of Microsoft applications like Word and Excel," Pang noted. "This deal with Capgemini is consistent with that move," he added.

SAP competes with Oracle, but it's also a big seller of Oracle's database management products through enterprise ERP sales -- to the tune of about "a billion dollars in resale through SAP a year," according to R. "Ray" Wang, enterprise strategy partner at Altimeter Group, in a phone call. So there's a competitive reason for SAP to support other database apps.

"Now, most customers do want Oracle in that marketplace," Wang added. "But if [SAP] can push out [Microsoft] SQL Server [and] they can show a cost savings, or in other areas like IBM DB2, they're going to do that."

Another advantage to the deal is integration around Microsoft's .NET Framework rather than working with SAP's platform. Wang said that SAP has not been successful in "making NetWeaver an industry standard." Moreover, NetWeaver has not been easy to use for many of SAP's partners.

"What we're seeing is a lot of people starting to move towards .NET for a lot of the expenses and a lot of the development going forward," Wang said. He added that it's much easier for developers to find .NET resources.

The Capgemini deal likely will not be a way for Microsoft to expand its own Dynamics ERP solutions into this enterprise market, according to Pang.

"I don't think this is going to have any impact on the sales of Microsoft Dynamics applications since we are really talking about two different customer sets," Pang said. "Capgemini is going to offer it to some of the biggest SAP customers, which are not likely to use Dynamics. Nor would this deal have any impact on SAP ERP sales. If anything it would simply add more value to SAP systems."

Pang described the Microsoft-Capgemini deal as more of "movement to upstage Oracle, which now stands to be on top of the game when it comes to ERP integration with its recent Application Integration Architecture strategy." Oracle is promising easy integration, but if that's the case, Capgemini's help might not be needed, he noted.

Capgemini describes its NetWeaver integration efforts here.