Whos Winning Now

By Renee Boucher Ferguson  |  Posted 2006-09-19 Print this article Print

Whos Winning Now?
Charles Phillips, Oracle co-president with CFO Safra Catz, said during the Sept. 19 earnings call that hes counted 88 "head-to-head" wins over SAP in the first quarter, including Walt Disney, Lockheed Martin, Electrolux and US Steel. "These were some strategic wins," said Phillips, who also said that Zales, another first quarter win, is replacing its SAP implementation—and its CIO—with Oracle products. Ellison outlined Oracles strategy for competing with SAP: An underlying standards-based middleware platform for Fusion Applications and industry specific knowledge going beyond "just SAP ERP." "We think Oracles strategy is helping us overtake SAP and win market share," said Ellison. What Oracle and SAP are battling is over their respective SOA strategies that include their applications suites (Fusion and mySAP ERP) and underlying middleware platforms (Fusion Middleware and NetWeaver). The goal is to not only retain existing customers—in Oracles case particularly, given the massive user base its acquired—but to add new customers that use their next generation suites and platforms. Both vendors will also look to lure ISVs to standardize on their platform moving forward. The irony is that both companies are on a similar time frame—thats yet to be realized in either case. SAP still has a massive percentage of its customers that need to upgrade from R/3 to mySAP ERP. With current commitments, SAP executives estimate the bulk of its 30,000-plus customers will move within the next five years. At the same time, the company expects to complete its Enterprise Services Architecture roadmap, which includes the service enablement of its applications, around 2007. Oracle, at the same time, is in the process of creating its next generation application suite thats expected for delivery around 2008. The catch here is that Fusion Applications, while based on Oracle E-Business Suite, still has the daunting task of bringing in functionality from three major acquisitions: PeopleSoft, J.D. Edwards and Siebel. Meanwhile, both companies have to keep their existing customer base happy. Despite Oracles previous reputation as a company that would acquire customers only to abandon them after implementation, its done well in retaining customers over the past two years. SAP, at the same time, seems to be bending over backward to attract an ecosystem around NetWeaver and mySAP ERP (Oracle has yet to establish a strong ecosystem around Fusion Applications). Ellison said he thinks Oracle will have the last word in this competition. "We think we are unique in the industry with a database, middleware and applications that all play in concert," said Ellison. "And as our applications come out we have a better chance to get way ahead of SAP. And well continue to acquire industry specific applications. If they hold their current strategy I cant see our gains slowing, or maybe even accelerating." Check out eWEEK.coms for the latest news, reviews and analysis about productivity and business solutions.


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