Microsoft Says It Wooed SAP, and Oracle Trial Takes Note

The New York Times > Technology: "Microsoft issued a press release early yesterday morning saying that it had held discussions with SAP, the big German maker of business software, about buying that company. The merger talks began late last year, the terse statement explained, but Microsoft broke off the negotiations after weighing the 'complexity of the potential transaction' and the management headaches of trying to put together two huge software companies.

Microsoft made the disclosure before it was presented in the trial of the antitrust case brought by the Justice Department to contest the Oracle Corporation's hostile $7.7 billion bid for PeopleSoft. Microsoft is not a litigant in the antitrust case. But its presence looms large in the courtroom, especially its strategy in business software - a $25-billion-a-year market for the back-office programs that companies use to manage their finances, human resources, procurement, sales and customer relations.

The Justice Department contends that the market for supplying business software to the largest corporations is an oligopoly of three - SAP, Oracle and PeopleSoft. If Oracle is allowed to buy PeopleSoft, the Justice Department and 10 states assert, the number of major rivals in business software will be reduced from three to two, thus driving up prices."