European and US regulators would have been unlikely to approve any deal between Microsoft and SAP, according to analysts.

Talks between the two companies, which ended earlier this year, were revealed during Oracle's appeal against the US Department of Justice decision to block its hostile bid for PeopleSoft.

"A joint Microsoft/SAP would have absolutely dominated software spending by large enterprises," said Philip Carnelley, research director at Ovum, in a statement.

"However, the technical, organisational and cultural obstacles would have been formidable. We wonder what the regulators would have made of this too. We are not surprised that it soon became clear that the idea was a non-starter."

But Carnelly warned that Microsoft's interest in SAP showed that no company was safe from a possible acquisition.

"Clearly [Microsoft] is prepared to think big and contemplate using large parts of its cash pile. No-one is safe," he said.

"Overall this says more about Microsoft's intentions and the need for regulators to get a grip on the software industry."

Bruce Richardson, an analyst at AMR Research, also believes that regulators would have been forced to act.

"While interesting, a Microsoft and SAP combination would have a hard time making it past legal hurdles in the US and Europe," he said. "Oracle merging with PeopleSoft would be minuscule next to the mammoth Microsoft/SAP combination."

Meanwhile, Microsoft is continuing its battles with regulators in Europe. As expected, the software firm has now filed its appeal against the European Commission ruling made in March that it violated anti-trust law.

The ruling was accompanied by a fine of €497m, a demand that Microsoft make available a version of its Windows software without Windows Media Player and provide more technical information to competitors.

But Microsoft made no reference to the EC's requirement that it produce a second Windows version. The company was given 120 days to do this, and 90 days to offer extra technical information. The 90 days expires in about two weeks.

Additional reporting by Peter Williams.