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By | Gavin Clarke 15th December 2005 17:34

Mendocino - a love that dare speak its name?

Inside the Microsoft/SAP affair

Hepburn and Tracey, Reagan and Thatcher, Microsoft and SAP. What's the connection? Individuals - or companies - who can't commit to each other fulltime, yet who also can't seem to stop sharing each others' company.

Microsoft and SAP shocked the world in 2004 when they confirmed the existence of merger talks. While these didn't produce the intended results, that didn't mean two of the biggest forces in software decided to go their separate ways after the initial date.

Far from it. They followed up in April 2005 by announcing Mendocino, a project linking SAP's notoriously proprietary back-end ERP architecture and processes to Microsoft's ubiquitous front-office desktop productivity suite, Office.

The first fruits are now ripening. Remarkably for a Microsoft-backed roadmap, Mendocino is slipping out as promised in the fourth quarter to a select number of companies - 40 customers and 10 partners are due to get Mendocino code this month. A further 50 are expected to get code in April with Mendocino 2.0 due in July.

Ripe for plucking

Mendocino is a critical step for Microsoft and SAP, which recognizes both each others' relative strengths and addresses their respective needs in staying relevant to their respective markets.

For Microsoft, Mendocino is a vital step in its clearly emerging mission of turning Office into a portal on to enterprise data. Office 12, due in 2006, is expected to achieve this in the Microsoft domain through greater integration with Windows servers. Office 12 is, we are told, to feature improved business intelligence (BI) as Excel spreadsheets access data held in SQL Server while a server-based set of Excel Services will allow customers to secure and share data.

That's an essential value proposition for Microsoft for two reasons. First, it contributes to the underlying mission of defining each new version of Office against its predecessor by bringing in new features that help enhance its capabilities and appeal as a piece of collaborative software. This feeds into Microsoft's second objective: of maintaining growth in the Office franchise.

Thirty percent of Office users have seen no reason to purchase the last three versions of Office because the product they have already meets their desktop productivity needs. Those needs? Word processing and running spreadsheets.

As far as Microsoft is concerned, SAP is "another" back-end system for Office to pry open, like SQL Server, whose data can be served to the front-office user inside Office. It's no coincidence 42 per cent of SAP installations rely on SQL Server to provide the database layer of their application architecture.

SAP, meanwhile, is the Bridget Bardot of IT. Looked great in the day but now must work harder on its looks and to retain the public's interest. SAP needs Mendocino to hook Office customers, Windows application developers and business process consultants into its enterprise resource planning (ERP) software.

Mendocino means SAP processes, such as time management, budget monitoring and travel and expense management, can be accessed inside Office. The companies are promising the ability to access functionality via extended application menus, synchronization between Microsoft Exchange Server and SAP, the ability to retrieve information held in SAP systems through Microsoft Excel, and to also submit data to SAP through Office InfoPath forms.

Integration for end users is the first step in this story, through. An inevitable consequence of any server, desktop or device initiative from Microsoft is the developer and partner pay off. Developers and partners expand the base-line functionality provided by Microsoft by delivering their own add-ins. Also on the trail will be business process consultants, like the Accentures, who will devise process and workflow integration for specific customers running Office and SAP.

Upgrade, she wrote

That's a vital consideration to SAP, who has spent the last three years trying to broaden its appeal among mainstream developers and ISVs, who are not versed - or interested - in SAP's proprietary ABAP architecture.

NetWeaver has been SAP's flag carrier in this strategy, but the going has been slow. Less than 5,000 out of a total 30,000 SAP customers have moved to NetWeaver since 2003, while the majority are still on legacy R/3.

Opening up SAP brings the company's architectures and processes into the field of view of an army of ISV and consulting partners who'd normally just focus on Microsoft.

Mendocino has been hailed as Microsoft's most important alliance since MS-DOS with IBM. And certainly, when the world's largest software company decides works with world's largest supplier of enterprise applications, something is afoot.

Mendocino represents an intersection of mutual self interest for both companies. It delivers all the benefits of Office as an enterprise information portal to Microsoft while unlocking a developer and partner ecosystem coveted by SAP without the strategic, tactical and legal mess associated with a big merger.®

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