SAP has shown off the initial results of its work to integrate its enterprise applications with Microsoft Office. But experts said the vendor's efforts need to reach deeper to offer true benefits to users.

From late December, about 40 customers gained access to software codenamed Mendocino, allowing them to view and edit MySAP back-office programs without leaving the ubiquitous Microsoft user interface.

Initially, integration will be limited to a few areas, including budget monitoring, time management and holiday requests. A second beta is due in April, more than doubling the number of testers, and a commercial release is set for the third quarter.

The enterprise resource planning (ERP) giant needs to deepen functionality, however. "The current scope of Mendocino is limited to a few transactions," said AMR Research analyst Judy Sweeney. "The more interesting role-based user interface deliveries will come with Mendocino Version 2, to be integrated with Microsoft Office 12."

When Mendocino was announced in April, some observers cautioned against high expectations. "It does not deliver true knowledge worker (that is, workflow or process) integration, which would require a significantly higher investment level from both parties," wrote Gartner analysts. "Moreover, Mendocino may lag behind other Office releases, so customers may have to remain with the [Office] version that offers the strongest integration."

While the integration could extend SAP's reach to more users, it might also limit the attraction of Microsoft's own Dynamics line of applications aimed at mid-sized firms. The lack of price details and clear licence requirements also leaves the value of Mendocino open to question.

Meanwhile, SAP will continue to build up its own lines in mid-2006, offering new releases of MySAP Business Suite, SAP Global Trade Services, SAP Analytics and NetWeaver.

Separately, ERP specialists Lawson and Intentia are now expected to conclude their merger by May this year.