I agree with you. MS and SAP would be a pretty formidable force.
Having said that, MS continue to make very good strides in the business market but they still need to play in the consumer market.
Having said that, MS continue to make very good strides in the business market but they still need to play in the consumer market.
That kind of merger would be unique in Microsoft's history[4]. In fact Skype is already Microsoft's largest merger in history by a sizable margin.
EDIT: The ETR listing is valued in euros, where 55 billion EUR roughly translates to 77 billion USD. Although I still don't know if that fully accounts for SAP AG's value.
[1] http://www.google.com/finance?q=NYSE%3ASAP [2] http://www.google.com/finance?q=ETR:SAP [3] http://www.softwaretop100.org/global-software-top-100-editio... [4] https://secure.wikimedia.org/wikipedia/en/wiki/List_of_merge...
But there is indeed a problem caused by SAP's size. It's completely uncertain whether regulators in Europe would allow such a deal to happen. Microsoft and SAP wanted to merge many years ago (when MS was arguably more powerful) but it was called off due to regulatory issues.
In my opinion, buying SAP would be Ballmer's worse nightmare - he wouldn't even know where to start in harnessing the energies of both companies, and that's why we'll probably never see this happen.