SAP Will Return To Mostly Organic Growth

SAP's acquisition of Business Objects was out of character for SAP, which historically has grown organically with some small spot acquisitions. In terms of scale, the Business Objects deal will continue to be an exception for SAP: We don't expect SAP to make other acquisitions of this size — and certainly not of large application vendors. However, SAP will be a more active acquirer of midsize software companies with middleware products that help SAP strengthen its NetWeaver platform. NetWeaver lags behind the IBM WebSphere, Oracle Fusion, and Microsoft .NET application server platforms, which are the core of any service-oriented architecture. We expect SAP to make some midsize acquisitions in areas like enterprise content management, but it will not make a counter-bid for BEA Systems nor become an active buyer of mid-size app vendors.