The Buzz

Oracle vs. SAP

Word War III

Whats better than delivering a strong fiscal first quarter and pushing your shares to a 52-week high? Poking a competitor in the eye. Just ask Oracle CEO Larry Ellison. Oracle, on Sept. 19, delivered fiscal-first-quarter net income of $670 million on revenue of $3.6 billion to handily top Wall Street estimates. After that performance, Oracle launched the trash talk in its earnings statement.

To wit:

Oracle President Charles Phillips: "Were rapidly taking applications market share from SAP. Q1 was the second consecutive quarter that Oracles applications new license sales growth was 80 percent or more. Thats 10 times SAPs 8 percent new license sales growth rate in their most recently completed quarter."

CEO Larry Ellison: "SAP appears to be rethinking their strategy as they lose application market share to Oracle and confront the difficulties of moving their application software to a modern [service-oriented architecture, or SOA]. Theyve just announced that they are delaying the next version of SAP applications until 2010. Thats a full two years behind Oracles scheduled delivery of our SOA Fusion applications. And now [SAP CEO Henning] Kagermann is talking about an acquisition strategy to augment SAPs slowing organic growth. These are major changes in direction for SAP."

Bill Wohl, SAPs vice president of public relations for products and solutions, in a statement released 4 hours and 27 minutes after Oracles earnings release, said: "Larry Ellisons statements in todays Oracle earnings press release about SAPs product and acquisition strategy are a complete misrepresentation.

"Since January of 2003, SAP has consistently articulated and delivered on its vision for enterprise SOA following a course of organic growth combined with strategic acquisitions. SAP offers customers market-leading, enterprise SOA applications today while Oracles next-generation applications exist only in PowerPoint and wont be delivered until 2008 or beyond.

"MySAP ERP 2005 gives customers and partners a world-class ERP platform with planned, regular functionality enhancements without the need for major upgrades through 2010 and has been shipping to customers since June of 2006.

"By contrast, Oracles statements about SAP and their own Fusion progress continue to be inconsistent and misleading. In January, Oracle claimed they were halfway to Fusion, and, two weeks ago, they said they were not even halfway done—Oracle needs to adopt one version of the truth and be honest with the market on its actual progress."

The reality: Its way too early to call the winner of this scrum. Meanwhile, its not a zero-sum game for either party. For now, it looks like Oracle has been able to keep customers it has acquired via acquisitions. However, the next big milepost in this battle isnt going to come for more than a year, when Oracles Fusion rolls out. In the meantime, expect more sniping.

BlogWatch

The new Napster

Is YouTube about to implode? Dallas Mavericks owner and entrepreneur Mark Cuban thinks it is possible.

At www.blogmaverick.com, Cuban riffed: "What is it about You--Tube.com that has made it so successful so quickly? Is it the amazing quality of user-generated content? Is it a broadband-fueled obsession with watching short videos? No & No."

According to Cuban, the two biggest reasons for YouTubes success are free hosting of videos from any third-party site (why pay for bandwidth?) and copyrighted music and videos. "This so reminds me of the early days of Napster," Cuban wrote. "They were the first to tell you it wasnt illegal. They didnt host anything but an index to link to all the illegal downloaders. YouTube doesnt upload anything illegal and will take down whatever you ask them to. Sounds legit, right?"

—Compiled by Larry Dignan