Informatica's Sweet Deal With SAP Doesn't Mean Merger

Informatica(INFA - Cramer's Take - Stockpickr) may be getting cozy with SAP(SAP - Cramer's Take - Stockpickr), but its sweetheart deal does not signal a future merger.

SAP will embed Informatica's data integration software into SAP applications and its NetWeaver platform, enabling its customers to integrate and track data from non-SAP, third-party and legacy systems, the companies announced Monday.

Investors had been abuzz on Monday that the agreement suggested a merger between the two companies was closer to a reality.

"This is a technology that neither SAP nor Oracle -- nor other partners -- wants to build," says David Yockelson, vice president of research for the 451 Group, which specializes in technology research. "The significance of this relationship is not indicative that there's a deal about to happen."

"Being the blessed technology for the SAP environment represents a key opportunity," for Informatica, because so many of the German business application software giant's customers want to integrate data from multiple sources, says Carl Olofson, vice president of research for IDC.

"This is an important step because SAP is a closed system: You have to go through their [application programming interface] to exchange data with the SAP environment," Olofson says. "Being able to work from the inside should help a lot."

Informatica's key competitors in data integration are IBM(IBM - Cramer's Take - Stockpickr) and Business Objects(BOBJ - Cramer's Take - Stockpickr).

But Oracle(ORCL - Cramer's Take - Stockpickr) is also "coming into the game," Olofson says.