Amid the whirlwind of conference calls, analyst briefings and Wall Street meetings held this morning in connection with Oracle Corp.'s bid to buy PeopleSoft Inc., there seemed to be nothing for SAP to do -- except wait and worry, as one analyst said.
SAP, the largest inter-enterprise software company in the world, woke up Friday morning to the news that its major competitors may be joining forces -- and presenting SAP with a much larger, wealthier opponent.
"This is definitely a threat to SAP," said Michael Doane, vice president of professional services strategies at Meta Group. Doane attended the morning conference call in which Oracle CEO Larry Ellison discussed his company's plans to offer $5.1 billion for PeopleSoft.
"My favorite piece of this is 'what does SAP do?' " Doane said. "There is nothing for them to do right now but wait and worry."
A combined Oracle and PeopleSoft would obviously "cut the margin that SAP has had in being the largest ERP provider," Doane said. "PeopleSoft is so strong in areas like education and [the] public sector. This presents some new challenges for SAP."
SAP declined to comment on the possible PeopleSoft acquisition, telling Reuters news service that the company would continue to focus on acquiring technology know-how and expertise and not grabbing market share. SearchSAP.com could not reach an SAP spokesman this morning.
Peter Wolf, principal consultant at Wayne, Pa.-based E5 solutions group, was among those analysts saying they were not so sure that Oracle would be successful in its attempted acquisition. If the deal does go through, he said, SAP will surely feel its impact.
"This would mean a powerhouse that didn't exist as a single counterbalance to SAP before now," Wolf said.
He doubted, however, that the user community would feel any pain as a result.
"I don't think it has a substantial impact on the users, or the ERP community," Wolf said. "It might mean fewer choices, but if you are talking about SAP users, then they are already trying to stick to that SAP platform. What does it matter to them how many other parties are out there?"
Lou Torres, an SAP Basis administrator at Bellevue, Wash.-based Paccar Inc., said his company just voted to implement an SAP product, and that, while Oracle was considered as a competitor, the company received no final votes from the the implementation team.
"This acquisition is a very good chess move for Oracle," Torres said. "And maybe it is the only way Oracle can ever hope to win a small piece of the action from SAP when it comes to business apps.
"I say 'small' because, even with an acquisition like, this it will take Oracle time to develop trust in the business market."
The continuing consolidation of the market, though, is bad news for the entire industry, Doane said.
"These consolidations are only bad for the clients," Doane said. "You can spin it anyway you like, but these continuing reductions in choice are not good for customers."
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