Some analysts believe that Hewlett-Packard's new CEO Leo Apotheker, will use acquisitions to help bolster Hewlett-Packard.

Christopher Baum, at Software Advice, takes a look at 14 possible acquisition targets.

HP Mergers & Acquisitions: Who's Next?

It's an interesting list but I disagree with several of the choices especially his top choice: SAP.

Buying SAP is not a good strategy. IBM is a good example for why this is a bad idea.

Wall Street analysts have written many reports over the years about IBM buying SAP and what a great move that would be. When I was working at the Financial Times my editors would always ask me to ask IBM CEO Sam Palmisano or Steve Mills, head of IBM's Software business, about buying SAP.

I didn't ask them that question because I knew it would have been a wasted question. I knew it wasn't in IBM's plans.

In one of my earlier interviews I had spoken with Steve Mills about the Software group and about some of its strategic mistakes. One of these was to try and get into the enterprise applications business. IBM lost a lot of money in the 1990s trying to sell its own enterprise software.

But IBM salvaged some wisdom from that experience, as spending in IT shifted more to services; IBM realized it could make far more money selling IT services around enterprise software.

For every $1 that SAP received in license revenues, companies were spending $9 in services: installation, design, operation, management. And IBM was winning massive SAP contracts and booking 9 times SAP's revenues. Why buy the business?

That's why IBM has greatly expanded its IT services business over the past ten years. There is a lot of money in services.

Why should HP buy SAP when the best part of the business is outside of SAP?

The best part is in all the services required to build and use the software. SAP itself is trying to get more of that lucrative market.

Tibco Software

There are several companies that are not on Mr Baum's list, such as Tibco Software, handily located in the same neighborhood as HP HQ and with lots of high margin software and services revenues.

Also, how about a merger with Oracle?

An Oracle + HP combo would be very impressive. Rather, it would be an Oracle + Sun + HP combo. It could match IBM in nearly every major IT and services category.

Mark Hurd, the former HP CEO now works at Oracle, so the integration would be easier.

Larry Ellison would spin-off HP's PC and printer business, and then acquire Salesforce and the next Oracle CEO: Marc Benioff. Maybe.

HP [HPQ] is trading at $42.61, nearly $10 below $52.35 a year ago. HP has a market cap of $90.5 billion.

Oracle [ORCL] stock price has had strong growth over the past six months moving from $25.38 to $31.91 at the close of Monday markets. Oracle has a market cap of $159.6 billion.