IBM, SAP To Jointly Develop Business SoftwareIBM, SAP To Jointly Develop Business Software

IBM and German applications developer SAP on Monday disclosed a plan to work together for the first time to create a new software product.

Under the project, code-named Atlantic, the two companies will develop middleware designed to place complex data from SAP's business applications directly into IBM's easier-to-use Lotus Notes environment.

The goal, the companies said, is to give customers a central place on their desktops from which they can access e-mails and other personal data served up by Notes and business information produced by SAP applications.

"Businesses are looking to find better ways to collaborate and manage their business processes," said IBM Lotus general manager Michael Rodin, in a statement. "This IBM-SAP solution addresses both challenges in one seamless package for millions of users."

Specifically, the software developed under project Atlantic will integrate into Notes data gathered by SAP's Business Suite, which includes modules for customer relationship management, ERP, project life-cycle management, and supply chain management.

IBM and SAP said that, in developing the software, they are responding to requests for such a package from "thousands of mutual customers." IBM said the majority of its top 100 customers also use SAP software.

IBM already works closely with SAP. The company earns millions of dollars by dispatching legions of consultants and programmers to help Fortune 500 companies install SAP's complicated business software. Monday's announcement, however, could mark the beginning of a closer relationship between the two vendors.

The primary aim of any such alliance would be to offset the growing influence of Oracle, which through acquisitions is consolidating much of the business software market. Oracle's 11g database offering competes with IBM's DB2 product, while the ERP software it acquired through buyouts of PeopleSoft and JD Edwards goes head-to-head with many of SAP's products.

Some analysts have suggested IBM should acquire SAP outright in order to counter Oracle -- which last week disclosed an agreement to purchase middleware vendor BEA Systems for $8.5 billion.

But any merger speculation sparked by news of project Atlantic should be tempered by the fact that both IBM and SAP have themselves recently announced plans to spend billions buying companies whose products are directly competitive with each other. IBM in November announced a deal to acquire business intelligence software vendor Cognos for $5 billion. A month earlier, SAP disclosed a pact to purchase BI software maker Business Objects for $6.8 billion.

IBM and SAP said they expect software developed under project Atlantic to be available by the fourth quarter of 2008.