Ellison: Oracle Poised to Outgrow SAP in ERP Market

 
 
By John Pallatto  |  Posted 2007-03-20 Email Print this article Print
 
 
 
 
 
 
 

Oracle CEO Larry Ellison claims his company is No. 1 in the CRM segment and is well-positioned to catch up to SAP in the enterprise resource planning market.

Oracle CEO Larry Ellison claimed that his company is a "strong No. 2" to SAP in the ERP applications business and has the product strategy in place to outgrow its archrival. Ellison made his comments on March 20 as Oracle reported third-quarter financial results for fiscal 2007 that showed the company generated revenue of $4.4 billion, up 27 percent, and net income of $1.03 billion, up 35 percent from the same quarter last year. Software revenue was up 25 percent to $3.5 billion, with new applications license revenue up 57 percent, according to Chief Financial Officer Safra Catz. New database and middleware license revenue was up 17 percent while services revenue increased 36 percent to $916 million.
Click here to read about the release of Oracles governance, risk and compliance suite.
"We exceeded guidance on every metric with strong revenue growth across all product lines and in all geographies. Weve now completed 11 quarters of our five-year [Earnings Per Share] growth plan of 20 percent per year, and we are delivering earnings growth comfortably ahead of that target." Catz said. Ellison said he believed that Oracle was well positioned to continue growing its ERP (enterprise resource planning) business faster than SAP can. "SAP may be the worlds No. 1 ERP company. But ERP is a slow-growing, relatively mature business," Ellison said. SAP is concentrating on selling ERP software to smaller and midsize companies and is marketing separate product lines, including R3, MySAP and the new A1S product suite for the SMB (small and midsize business) market, Ellison noted.
In contrast, Oracles strategy with its Fusion product line, which combines software from its multiple corporate acquisitions over the past four years, is "to have one ERP system, one suite, that will be available on demand, that will be available for small and midsize companies all the way to the largest companies," Ellison said. Ellison also claimed that Oracle is "No. 1" and increasing its market share in the CRM (customer relationship management) market segment. "CRM is extremely important because it is a less mature marketplace. It is growing much faster than ERP and were gaining share," he said. Microsoft is taking on SAP, Oracle and Salesforce.com with its Dynamics brand. Click here to read more. Oracle is also expanding the sales of "industry-specific" application suites that it will sell to a wide range of its customers, from the largest down to midsize companies with revenue of about $100 million, he said. Ellison contended that this strategy will have a greater chance for success than SAPs strategy because it is selling one ERP and CRM system to the same customer set it is already calling on. Ellison also said Oracle "is off to a very solid start" in its Linux support business by signing Dell, Hewlett-Packard and CDW to resell its Oracle Enterprise Linux package. "We have signed a number of support contracts, some for over $500,000," Ellison said. Furthermore, Oracle has "replaced Red Hat at Yahoo and numerous other customer sites" as the Linux support supplier. "Were not going to build the Linux business overnight. But we will build it," he said. He also claimed that Oracle has overtaken rival BEA Systems in the middleware market. Oracles middleware business, he said grew 82 percent in the fiscal third quarter, while BEA reported that its middleware business grew 8 percent in its more recently reported quarter. Over the past 12 months Oracles middleware business grew an average of 60 percent compared with 12 percent growth for BEA. "It took us a long time—over five years—to catch and pass BEA, but we did it," Ellison said. Check out eWEEK.coms for the latest news, reviews and analysis about productivity and business solutions.
 
 
 
 
John Pallatto John Pallatto is eWEEK.com's Managing Editor News/West Coast. He directs eWEEK's news coverage in Silicon Valley and throughout the West Coast region. He has more than 35 years of experience as a professional journalist, which began as a report with the Hartford Courant daily newspaper in Connecticut. He was also a member of the founding staff of PC Week in March 1984. Pallatto was PC Week's West Coast bureau chief, a senior editor at Ziff Davis' Internet Computing magazine and the West Coast bureau chief at Internet World magazine.
 
 
 
 
 
 
 

Submit a Comment

Loading Comments...
 
Manage your Newsletters: Login   Register My Newsletters























 
 
 
 
 
 
 
 
 
 
 
Thanks for your registration, follow us on our social networks to keep up-to-date
Rocket Fuel