In one of those strange ironies beloved of the business and technology world, the primary reason given for why Microsoft and SAP didn't end up as one company, despite Microsoft having taken a close look at such a prospect earlier this year...is that it would have proved too difficult to integrate the two businesses.

So much for The Age of Business Integration and all the software sold worldwide to support it.

Secret talks between the two companies apparently began late last year but ceased a few months ago "due to the complexity of the potential transaction and subsequent integration," Microsoft said yesterday in a statement.

Had Microsoft bought SAP the result would have been an 80,000-strong worldwide workforce, compared to IBM's 255,000. SAP has a market cap of nearly $50 billion.

Cynics are already speculating that it was a no-lose move by MS since now the entire world's ERP vendors, knowing that Microsoft "nearly acquired" SAP, will now fall over themselves to program .NET interoperability into their ERP packages to make themselves more attractive to MS for buyout - giving the Redmond-based company a helping hand in its fight for market share in the enterprise computing market.

Microsoft has already bought two of SAP's rivals in billion-dollar acquisitions - Great Plains Software, which it acquired for $1.1 BN in 2001 and Navision, which it bought for $1.3 BN the following year. The disclosure about MS having opened talks with SAP arose in connection with the US Justice Department's antitrust suit aimed at blocking Oracle's proposed takeover of PeopleSoft. Oracle's argument is that it gives the lie to Microsoft's contention that it only has designs on SMBs, but not full-fledged enterprise customers. Which in turn is why Oracle should be allowed to go ahead, says its lawyers.

In answer to the inevitable question as to whether any Microsoft + SAP deal would have been billed as an "acquisition" or a "merger," a joke has already begun doing the rounds of Interner message boards:

Q: What do you get when you merge Microsoft and SAP?
A: Microsoft.