There is a wonderful irony in watching the strategic convergence of SAP and Microsoft in the enterprise software market. With two very different legacies, and very different attitudes about product, technology, and customers, these competitors are more and more trying to address the same market issues and reach the same customers. But, when it comes to execution, they seem to be running in opposite directions.

SAP, once saddled with the unfortunately well-earned reputation of being complex and costly to implement, is making a major effort to streamline and simplify its product offerings for all markets. This simplification theme was very much in evidence last December at the company's annual analyst conference, and it can be seen in a number of current and forthcoming initiatives. These range from new features in the MySAP enhancement packages that target simplification to products like the Business Intelligence Accelerator and the SOA by Design model-based MySAP system that SAP board member Peter Zencke demonstrated at the conference.

The goal, particularly with SOA by Design, is to make SAP more palatable to the mid-market. But there's no doubt that everyone at SAP, from Zencke on down, knows that simplification will sell equally well in the boardrooms of top-tier customers.

Meanwhile, there's Microsoft's Dynamics. The good news in the last year is that Dynamics has left the orphanage and been welcomed as a full-fledged family member with all the attendant perks and privileges. Perk number one is, of course, that Steve Ballmer is now Dynamic's foremost cheerleader. Perk number two is that all that great development work going on across the rest of the company — in servers, analytics, integration, collaboration, portals, security, database, and on ad infinitum — is now being incorporated into the core of the Dynamics product line.

Which is also the bad news, unfortunately. Microsoft is a technology company, and the head of Dynamics, Satya Nadella, is a technology guy. So it's with no unearned pride that the Dynamics gang loves to brag about the way in which all the new functionality in Microsoft's systems software will blend with the new Office 2007 and make the Dynamics offering the coolest enterprise software suite in the market.

Problem is, all this new technology risks making Dynamics one of the most complex suites in the market. Or at least it begins to look that way. I started counting the number of new moving parts Microsoft was adding to the Dynamics backfield, and lost track at more than a dozen, whereupon I was told only half jokingly that there could end up being twice as many. Things have started to look so complex in Dynamics-land that suddenly the global systems integrators — companies like Cap Gemini, Tata, BearingPoint, and the like — are starting to get very cozy with Dynamics.

Which is where the wonderful irony comes in. SAP, in order to broaden its appeal and tackle new markets, is simplifying its once complex product suite. Microsoft, in order to achieve a similar goal, is making its once simple suite more complex. For SAP, the trick will be to achieve simplicity without becoming simplistic, while Microsoft will have to become comprehensive without being overly complex. Either way, the cards have now been dealt. Let's see how they play their hands.