Oracle's big user bash, OpenWorld, closed last week in San Francisco, with less direct mention of the do-or-die competition between SAP and Oracle than many would have expected. But this uncharacteristic silence belies the continuing focus on SAP by Oracle president Charles Philips and his team. Here is a summary of the key "get SAP" messages from SAP's biggest competitor.
Beat the Suite: One of the messages that Oracle hammered home at OpenWorld was that Oracle believes it is now a "best-of-suite" vendor, meaning that it has combined numerous best-of-breed applications, principally Siebel CRM, under a single "suite" umbrella. Similarly, Oracle feels that, with its Retek retail application, it has a "best of breed" application that it can take to different vertical industries, not just retailers. This positioning puts the onus on SAP to show how its suite remains competitive against Oracle's growing acquisition strategy.
Compete at the Edges: Another major anti-SAP message was that, with applications like Demantra, G-Log, and Agile, Oracle can now provide innovative new functionality to SAP customers that is more competitive than what SAP can offer. This is again a strategy meant to put SAP on the defensive, and push SAP to show that its own specific offerings in supply chain, transportation management, and PLM can compete with Oracle's acquisitions.
Go Vertical: Strong vertical functionality has always been a major competitive weapon for SAP, but Oracle's acquisitions have begun to whittle away at SAP's lead. Also, products like Retek have applicability in SAP strongholds like oil and gas: Retek can appeal to the retail side of these companies, many of which have extensive gas station/convenience store operations that Oracle believes it can bring over to its side. Message to SAP: get our more about the vertical advantage.
Play Open: Oracle is trying hard to play nice to its customers by giving them the option of staying with non-Oracle technology, instead of forcing an all-Oracle stack on its customers. The company has gone so far as to propose that its forthcoming Fusion Applications run on IBM's DB2 database, an absolutely unprecedented move for a company that is historically a rabid proponent of a single database strategy for its applications stack. This puts the onus on SAP to show how more open it is than many would have believed possible. (.NET-weaver, anyone?)
Get SaaSy: Oracle used this OpenWorld to talk more about software-as-a-service than it has in years, partly by claiming 3.5 million users running in some version of an Oracle on-demand offering. This is clearly the beginning of an anti-Business ByDesign positioning, not to mention part of an ongoing anti-Salesforce.com positioning. SAP can expect greater competition from Oracle in SaaS as 2008 unfolds, and SAP needs to be sure it can rise to meet the challenge.
Keep the Innovation Card: And then there's Fusion Apps and Enterprise 2.0. Oracle showed off some of its new toys – a hot Enterprise 2.0 CRM application and some early views of its Fusion Applications – that the company hopes will satisfy customers looking for evidence that Oracle is keeping the innovation flame alive. Again, the onus is on SAP to show off its innovation chops, particularly the pieces it can deliver today, as opposed to the mostly future capabilities that Oracle was showcasing. This is where I believe SAP has one of its greatest strength vis-à-vis Oracle, and it's where the race between the two companies is, for me, the most interesting.
What's next in the SAP vs. Oracle game? Stay tuned for the forthcoming SAP Analyst Summit, coming up in early December. This will be SAP's showcase moment to play a little leapfrog with Oracle. Expect rebuttals, challenges, and commentary on the above Oracle messages. One thing you have to say about this competition: it keeps everyone on their toes.
About Joshua Greenbaum
Joshua Greenbaum is a market research analyst and consultant at Enterprise Applications Consulting. He has more than 15 years of experience in the industry as a computer programmer, systems analyst, author, and consultant. Prior to starting his own firm, Enterprise Applications Consulting, he was the founding director of the Packaged Software Strategies Service for Hurwitz Group, which focused on technology, infrastructure and business issues in the enterprise applications market. |
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