Microsoft is looking to make more large acquisitions than even it has done historically and become a more distributed company, its chief financial officer John Connors has said.

Although Microsoft has decided to return a significant piece of its $60.6 billion cash hoard to shareholders and not pursue a takeover of German software giant SAP, large acquisitions are likely to increase, Connors told a conference audience.

"I think there is a probability that we will do more large deals than we have done historically. There are not many SAPs out there, but there is the potential that we could do a few big ones, but not likely that big," Connors said. A big deal would be over $1 billion dollars, Connors indicated.

Microsoft's discussions with SAP were disclosed in June at the beginning of a trial over Oracle's hostile takeover effort of rival PeopleSoft. The talks ended after Microsoft decided the deal and the post-union integration would be too risky. SAP is worth roughly $50 billion.

While not providing any details of where Microsoft is looking, Connors said Microsoft needs a policy change if it wants to grow by acquiring other companies. It is no longer possible to simply move key people, such as research and development teams, to Redmond, he said. "Increasingly some of the companies we have looked at have had more distribution than what we ideally like," he said. "I think we will have to have a more distributed model if we do more acquisitions."

Microsoft has historically done its development work done at its headquarters. However, acquisitions have already forced some changes. Vedbaek, Denmark, home of Navision, is a major development center for Microsoft Business Solutions, following Microsoft's purchase of it in 2002 for $1.45 billion.