IBM and SAP to develop joint software

A view of an IBM facility outside Boulder, Colorado October 18, 2006. Services and software companies IBM and SAP, longtime technology partners, will bring out their first joint software product in the fourth quarter of this year, the two companies said on Monday.

FRANKFURT (Reuters) - Services and software companies IBM (IBM.N) and SAP (SAPG.DE), longtime technology partners, will bring out their first joint software product in the fourth quarter of this year, the two companies said on Monday.

The product, codenamed Atlantic, will allow users to access SAP's Business Suite applications for workflows, reporting and analytics through IBM's Lotus Notes desktop software.

U.S.-based IBM and Germany's SAP, which was founded by five former IBM employees, have collaborated for 35 years.

IBM is the world's largest integrator of SAP's business-management software, SAP software is certified for IBM servers and SAP's favored development database is an IBM one.

The two companies, which have been the target of repeated merger speculation, said their thousands of mutual customers had asked for the functions that Atlantic software will supply.

Lotus Notes, which is designed for accessing business email, calendars and collaborative tools such as instant messaging from a Lotus Domino server, is used by more 135 million people worldwide, according to IBM.

SAP is the world's biggest maker of business software mainly used by large corporations to help them automate and manage supply chains, personnel or customers.

SAP's move to integrate its software with Lotus Notes is the latest step in a process of making its products more user-friendly and directly accessible to more employees at companies where it is deployed, increasing its user base.

The German company also develops software jointly with Microsoft (MSFT.O). Named Duet, it makes SAP's business applications accessible through Microsoft's Office programs.

SAP shares were down 8.6 percent to 30.80 euros by 10:44 a.m. EST, underperforming the German blue-chip DAX .GDAXI, which fell 6.6 percent. IBM shares did not trade on Monday, a public holiday in the United States.

(Reporting by Georgina Prodhan; Editing by Paul Bolding)