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SAP, Sybase ally for smaller business

The partnership is a setback for Microsoft, which has been the primary database supplier for SAP's Business One applications, which are targeted at small to midsize companies.

Software maker SAP said Monday that it has partnered with Sybase to use the company's database management software with its business applications.

The deal is seen as a blow for Microsoft, which has been the primary database supplier for SAP's Business One set of applications, which are targeted at small to midsize companies.

With the Sybase deal, SAP will be able to offer Business One on Unix and Linux operating systems, in addition to Windows, beginning next year. The companies said they also plan to develop mobile software as a result of the deal.

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An SAP representative said the deal is consistent with the company's product plans. In June, SAP signed a similar deal to bundle IBM's DB2 database with Business One applications, beginning next year.

The move also underscores Microsoft's role as both a supplier of core infrastructure software to software vendors and a seller of business applications that compete with those vendors. Microsoft is also investing heavily in the market for business applications aimed at small to midsize businesses.

Microsoft was not immediately available to comment on the SAP announcement.

Sybase and SAP plan to target companies in the financial services, health care, insurance and telecommunications markets.

SAP has also added a set of new software development and customer service features to its Business One applications, the company said. Business One, a package of pared-down business applications SAP introduced last year, now includes applications for tracking customer service requests, the company said. It also includes tools for customizing the applications using the Java and Microsoft .Net software development kits.

SAP has 1,600 Business One customers, most of whom are companies that have between 10 and 250 employees, said Gadi Shamia, vice president of SAP Business One. Most of its Business One customers are in Europe, where the company first launched the products. SAP introduced them in the United States five months ago and has fewer than 100 American Business One customers, Shamia said. SAP Business One license fees start at $3,750 per user.

CNET's Alorie Gilbert contributed to this report.