While SAP AG isnt expected to make any earthshaking announcements at its upcoming July 20 second quarter earnings call—the cat is already out of the bag that SAP will miss analyst expectations for earnings—the 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 SAPs growth strategy normally departs from its acquisition-heavy archrival Oracle, SAP may indeed have some holes to fill.
"What I think theyre 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 dont have something visual to allow business users to adapt business processes, you dont have anything."
SAP does have a number of relationships with BPM vendors. IDS Scheers modeling tool is part of SAPs 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 SAPs massive installed base have updated to the companys mySAP ERP (enterprise resource planning) 2005 platform. For Oracle, its another two years until its Fusion Application stack will be available—the 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 Oracles 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.
If its latest quarter earnings are any indications, Oracle is on the right track. On June 22, Oracle reported $2.12 billion in total new license sales, a 32 percent increase over the same period last year, and a good indicator of future growth.
More importantly, application sales rose a whopping 83 percent—a 56 percent gain over the same quarter a year ago, and one that excludes any software sold under the Retek and Siebel umbrellas, two companies acquired by Oracle earlier this year.
"In the last quarter we grew 71 percent, SAP grew 14 percent," said Phillips during the July 18 call with analysts. "One thing we did different is address the key message SAP had against us."
In response to SAPs suggestions that Oracle customers will be forced to upgrade to Fusion, according to Phillips, the company announced lifetime support for its PeopleSoft and JDE applications—and that it would continue to upgrade the separate suites.
While the strategy may be quelling customer qualms, its not pulling any new revenues, according to Gartners Genovese.
"There are still a lot of SAP implementations going on—a lot more than JDE or PeopleSoft," said Genovese. "[Oracle] hasnt talked of a new PeopleSoft or JDE customer in a year."