Microsoft and SAP are working together to make SAP's business management software and Microsoft's Office products work better together.

The two considered a formal merger last year but will now jointly develop new products. The project is code-named Mendocino and aims to bridge the gap between desktop applications and the information buried within enterprise applications.

Mendocino will let users access information from SAP enterprise applications through their more familiar desktop applications. In addition the two firms will resell each other's applications.

Products will be available for some customers from the fourth quarter of 2005 prior to full launch in 2006.

Siemens VDO, an automotive supplier planning on using Mendocino, said systems previously available to a handful of SAP power users will be available to thousands of users through Office. Siemens hopes to improve productivity with minimum need for training.

More details on SAP website here.®

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