The Oracle vs SAP War – Really?

Seriously now – I know I work for SAP, but since a thousand years ago I was a JDE consultant I like to think I have a fairly objective view of the world of ERP. I see an awful lot of analysts (who quite frankly – have probably never worked a day in their life in the “trenches” so to speak) spouting off about Oracle taking over from SAP as the market leader, why SAP should be worried, and blah blah.

Newsflash. SAP is not worried. This isn’t arrogance – it’s pure pragmatism. Oracle is years, no really, years behind SAP in the areas that matter.

Fusion Applications was announced in Q1 2006. Understand that since Oracle buys it’s software rather than growing organically (80/20 in my estimation) – integration and integrated applications are absolutely crucial to the average CIO. The sell from Oracle is that they are now a “one stop shop” able to supply and fully integrate the entire suite of enterprise applications. In Q1 2006 SAP already had a maturing Integration stack called NetWeaver.

SAP have implemented thousands of NetWeaver applications with some fairly heavy integration. Users literally could not care less where their data resides or their applications reside. Everything is fully and robustly integrated. Oracle have yet to deliver the first generation of Fusion Applications http://www.cio.com/article/452717/Oracle_Fusion_Applications_Is_Delivery_Too_Little_Too_Late_or_Smart_Strategy_ and now they are pitching 2010.

SAP is on the 5th Generation NetWeaver with some very well integrated apps and some mature middleware. Even the small amount of aquisitions that have taken place have now been integrated (Business Objects for example) and new aquisitions (BPC from Outlooksoft) will be integrated fully in their next release.

So – SAP has very little to worry about. Honestly if I was a CEO and my CIO told me he was going Oracle, I would ask him to consider his prospects at another firm.  I suppose analysts have to justify their existence by saying something, and I’m sure Oracle has very clever sales people to sway their opinion. The facts, however, speak for themselves.

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The Oracle / Sun thing

Well it’s very interesting that this buy-out has generated a lot of discussion around an IBM/SAP merger or a Microsoft/SAP merger.  Of course because of the relative sizes of the companies concerned it would be SAP that would be bought out. Not a cheap purchase though at 45 billion market cap. I don’t think it’s likely – both Microsoft and IBM have explored this before and backed away, but it’s fun to speculate.

IBM buys SAP scenario

Well IBM would almost undoubtably form tighter alliances between WebSphere and NetWeaver. Few people realise that we already collaborate on products and we have a center in Germany staffed by IBM people and SAP people for this reason. This almost brings me to my point, but lets leave that until the end. IBM uses SAP itself and shares many customers with SAP already, so this wouldn’t be an “Oracle buys Peoplesoft”  type of situation – we already are very well “meshed” together. Let’s look at the next scenario.

Microsoft buys SAP scenario

What would Microsoft do? I think they would leave the core but redesign the GUI for SAP. We’ve already separated the front-end quite substantially on SAP, so this will be very easy to do. Oh! and we’ve already collaborated with Microsoft on “Duet”. This is a Microsoft Office / SAP mash-up that gives very tight integration at the front-end.

So to look at the likelyhood of a buy-out in this light – I would have to say why? We (at SAP) are already aligned strongly with IBM and Microsoft and we convert clients from Oracle on an almost daily basis. I might be wrong here but I think it’s an expensive aquisition to accomplish very little. Market share yes – but neither Big Blue or Microsoft want to play in the Enterprise Application arena.

Fun to speculate though and time will tell.

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