Accounting software vendor Navision has confirmed that it is considering a "strategic transaction", after a story in the UK's Financial Times newspaper reported that Microsoft is close to completing negotiations for the purchase of the Danish software company.
Microsoft is expected to pay about $US1.2 billion for the company, the Financial Times said. It spent $1.1 billion on a US business software developer, Great Plains Software, last year. Both Navision and Great Plains develop business-planning software for small and medium companies.
Navision has released a statement in response to the rumours, saying that it "can confirm that it is considering a possible strategic transaction". Director of corporate communications Søren Christensen would not expand on this, saying that "'strategic transaction' is a deliberately broad term that could cover many things and I cannot add anything to the wording".
Microsoft, likewise, would not comment on the report.
The effect such an acquisition would have on the Australian IT channel depends entirely upon what Microsoft's plans would be for the Navision line of products. Navision announced a merger with competitor Damgaard in November last year, and their two products, Axapta and Attain, already compete with Microsoft's Great Plains software.
Microsoft and Navision have been cooperating on several fronts for some time - Navision's Attain product has been based on the Microsoft platform for several years, and several Navision staff are based permanently in Redmond, Washington to aid the integration between their products.
Nevertheless, the reports have caused confusion among Navision's channel partners in Australia. "It's hard to know what's going on without knowing [Microsoft's] reasons for buying them," said one reseller.
One observer in the accounting software market said that, considering the strong development partnership between Navision and Microsoft, an acquisition would not be too much of a surprise. But Ian Warner, of Tasmania's Information Solutions Works, said he was also unsure of why the software giant would be interested in Navision, considering its previous acquisition of Great Plains.
"I don't know why Microsoft would be interested in having multiple products like that," Warner said. "How would you put them together?"
Another reseller speculated that the acquisition could be more to do with Microsoft trying to gain further exposure in Europe, where Navision is prevalent but where Great Plains lacks penetration.
Warner said he would have thought that other large vendors that do not have business management software with such global reach (IBM, for example) would be more likely to be in pursuit of the accounting software developer.
Peter Maggs of Data#3 said the company has no official line as yet but, because Data#3 is a partner of both Microsoft and Navision, he would not be too concerned about a possible merger.
Maggs said it would be unlikely to affect channel partners in the same way Microsoft's acquisition of Great Plains had. "Navision has a rock-solid 100 per cent channel model, which differentiates it from Great Plains," he said. "It would be harder to muddy the waters."