SAP, Oracle Square Off over Market ShareBy Renee Boucher Ferguson | Posted 2006-07-18 Email Print
While SAP's growth strategy normally departs from its acquisition-heavy rival Oracle, SAP may indeed have some holes to fill as it looks to gain market share.
While SAP AG isn't expected to make any earthshaking announcements at its upcoming July 20 second quarter earnings callthe cat is already out of the bag that SAP will miss analyst expectations for earningsthe company will look to dispel any notions that Oracle is gaining market share.
It may also disclose acquisition plans, according to at least one analyst.
While SAP's growth strategy normally departs from its acquisition-heavy archrival Oracle, SAP may indeed have some holes to fill.
"What I think they're missing in order to achieve their vision is a BPM [business process management] product," said Gartner analyst Yvonne Genovese, analyst at Gartner, based in Stamford, Conn.
"If you don't have something visual to allow business users to adapt business processes, you don't have anything."
SAP does have a number of relationships with BPM vendors. IDS Scheer's modeling tool is part of SAP's NetWeaver stack and SAP Ventures, an investment arm of SAP, has an investment stake in Intalio, which develops a BPM execution engine.
Genovese said that while it makes sense for an acquisition target to already have an established relationship with its suitor, SAP has many other options to consider.
"There are a ton of small companies that could be an interesting acquisition for them" which may already have a Powered by NetWeaver relationship with SAP, said Genovese.
Oracle likewise is missing a native modeling-to-execution capability that enables users to model and execute processes in IT systems.
Both SAP and Oracle are taking a process-centric approach to application and platform development. That means developing (or breaking down existing applications) that can be broken down into their modular parts, enabling users to develop composite applications based on business processes.
It also means providing an integrated middleware infrastructure which SAP is doing with NetWeaver and Oracle is doing with Fusion Middleware.
But only a small amount of SAP's massive installed base have updated to the company's mySAP ERP (enterprise resource planning) 2005 platform. For Oracle, it's another two years until its Fusion Application stack will be availablethe applications will sit on top of Fusion Middleware.
In both cases, customers are taking a wait-and-see approach, hesitating on making any grand upgrade moves.
During a two-hour presentation July 18 highlighting the state of Oracle's business, co-president Charles Phillips weighed in on its competition with SAP, suggesting the company is beating its biggest rival in the both middleware and technology race.
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