It’s been the million dollar question — why didn’t SAP buy IDS Scheer?
All the signs pointed to the beginning of a beautiful friendship — consistent rumors that SAP may make a play for IDS Scheer, the long-time partnership, the 60% overlap in customers. When I started covering SAP more than a year ago, “keeping an eye” on IDS Scheer was one of the first things my boss told me to do.
The truth is — I don’t know why SAP didn’t buy them. SAP didn’t want to comment on the deal when I asked.
The past being the past, let’s pose the next relevant question. We talk a lot on this blog about consolidation in the ERP space. But as Forrester Research analyst Ray Wang said when I spoke to him about the Software AG/IDS Scheer deal, this bodes more consolidation in the middleware market.
To that end, what are the consequences of continued consolidation in the middleware market — and what’s SAP’s next move?
Integration continues to top the lists of concerns of SAP customers. In a recent SearchSAP.com survey of more than 200 SAP professionals, nearly 40% planned to increase integration between systems this year, and more than one-quarter named integration between SAP and non-SAP systems as their greatest challenge.
The webMethods integration suite is very competitive with NetWeaver, which now plays only in majority SAP environments, Forrester Research analyst Stefan Reid pointed out in his blog on the acquisition.
“SAP missed again an acquisition which would have been a great fit to their portfolio as well,” Reid wrote. “Software AG has now a major door into SAP’s install base heavily using ARIS in Europe and can sell the WebMethods integration stack aggressively against NetWeaver.”
And as Forrester Research analyst Clay Richardson and others point out in their blog, other than SAP buying Informatica or Software AG, the IDS Scheer acquisition leaves SAP with no other options to boost its NetWeaver stack. With Software AG’s webMethods, SAP could replace NetWeaver PI to better interface SAP applications with the outside world, they wrote.
Some SAP customers have webMethods already — they replaced Business Connector with it while waiting for NetWeaver.
That said, Software AG has given every indication it’s going to play nice with SAP. And some analysts doubt SAP will make a play for it. Too much of Software AG’s business is in legacy mainframes, and the webMethods portion is too similar to what NetWeaver does, according to AMR Research’s Dennis Gaughan.
What do you think?