SAP continues to lead all major software vendors globally and could take the lead this year in the U.S. market, despite a threat from a merged Oracle-PeopleSoft combo, according to analysts at Boston-based AMR Research Inc.
The combined revenue of Oracle and PeopleSoft for North America was larger than SAP in 2004, but AMR Research is predicting that SAP will continue to boost its license revenue, giving it the leadership position in the U.S. this year.
"SAP's revenue base has been rapidly shifting from Europe to North America, and SAP has posted five straight quarters of sequential revenue growth in North America," AMR Research said, in an alert to customers highlighting market consolidation in the enterprise resource planning (ERP) market.
Companies seeking ERP software will continue to see their choices diminish as market consolidation continues, according to AMR's alert, "SAP Versus Oracle: The ERP Heavyweights Vie for Position in 2005."
"In 2005, the top five vendors -- SAP, Oracle, Sage Group, Microsoft and SSA Technologies -- will account for 74% of ERP vendors' total revenue," according to AMR.
These top vendors are making acquisitions to improve their industry-specific software, AMR said.
SAP recently lost a bidding war to Oracle in the U.S. for retail software vendor Retek. Though the battle was short, the feud forced Oracle to spend more than $600 million for the company.
The battle also highlighted Oracle's intention to flex its muscles with the completion of its $10.3 billion acquisition of PeopleSoft in January. AMR said the drawn-out acquisition created uncertainty in the market-leading SAP buyers.
Despite the uncertainty, Oracle is combining the software technologies it acquired from PeopleSoft, and AMR said the merged Oracle is expected to obtain 19% market share based on total ERP vendor revenue.