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MBS Partners Prep For Acquisitions, Opportunities In Oracle-PeopleSoft Era

Microsoft will likely join forces with SAP or pursue new targets in the enterprise application business in the aftermath of Oracle's acquisition of PeopleSoft, Microsoft partners say.

Soon after the deal between Oracle and PeopleSoft was announced Monday, several partners predicted Microsoft will either re-engage in merger talks with SAP, or make a play for Lawson Software, Siebel Systems or other enterprise application vendors. Microsoft confirmed this past May that it had held discussions with SAP about a possible merger.

"Microsoft will not be happy about this [the Oracle/PeopleSoft merger]," said one partner close to Microsoft, claiming that the Redmond, Wash., vendor recently considered making a play at parts of PeopleSoft before the merger was approved. "This may make Microsoft more acquisitive in the coming months."

Oracle and Microsoft--and their partners--will clash increasingly as Microsoft moves upstream into the enterprise market and Oracle moves downstream, partners say.

"The game is on. Long term, it would appear to me that all ISVs, especially the large players like Microsoft, will seek expansion through acquisition," said Elmer Baldwin, CEO of Born Information Services, which serves customers with Oracle, PeopleSoft and Microsoft installations under one roof. "I hope Microsoft continues to buy best of breed, not just big offerings."

Microsoft would not comment for this story except to note that the company remains committed to its existing business applications strategy of serving small and midmarket enterprises and investing in Microsoft Business Solutions (MBS) for the long term, a spokesperson said.

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