, Oracle Turn Up Heat in Business App Battle

With its new ApexConnect family of integration tools, makes on-demand software a valid challenger to on-premises applications; meanwhile, Oracle remains a sleeping giant lying in wait.

There is a battle brewing in the business applications market, and its boiling down to two sides: on-premises versus on-demand software.

With, the poster child for on-demand software, racking up a half-billion dollars in revenues for its fiscal 2007 third quarter, its clear the on-demand sector is gaining ground.

To better delineate its integration strategy—a key differentiator in the on-demand versus on-premises feud— announced Nov. 27 ApexConnect, a family of tools designed to help users more easily integrate applications with third-party applications.

The concept with ApexConnect is that any application will maintain connections with legacy applications, Web services and other on-demand applications during (and after) an upgrade, given Salesforce.coms multitenant architecture and the ApexConnect tools.

The ApexConnect family of products includes a stable of about 25 preintegrated AppExchange partner integration offerings that link to common back-office applications, as well as custom integrations with the Apex APIs (Apex is Salesforce.coms proprietary programming language; AppExchange is its integration and development platform).

/zimages/4/28571.gifSalesforce co-founder Parker Harris discusses the details around Apex. Click here to read the interview.

ApexConnect also offers prebuilt integrations to SAP R/3 and Oracle 11i ERP (enterprise resource planning) applications, as well as to Microsoft Office and Outlook and IBM Lotus Notes. Finally, ApexConnect offers something called ConnectOut, an on-demand outbound messaging API that lets Salesforce.coms services talk to other applications.

The ApexConnect announcement is exactly the message needs to articulate at this time, according to analysts. "We still see consistently on-premises throwing out integration and customization as big hurdles to software as a service," said Rob Bois, an analyst with AMR Research, in Boston. "The big strategy from SAP and Oracle is to stave off customers from going off-premise for CRM [customer relationship management]."

The issue with going off-premise for on-demand CRM (or other functionality) is that users are stuck with the integration conundrum, according to Juergen Rottler, Oracles executive vice president of Oracle On Demand and Oracle Support Services.

"If youre, youre in a tough spot. Youre a one-trick pony," said Rottler, in Redwood Shores, Calif. "Their early success is almost turning against them. Customers are now looking at How do I [customize] all this customer information and integrate it? And they cant. Salesforce is scrambling to create this illusion of an application integration environment."

John Snead, director of Beer Operations at the Karl Strauss Brewing Co., however, doesnt look at as a one-trick pony. Rather, hes hoping to move more of his legacy applications to the AppExchange platform—things like reporting and aging desktop applications. A Microsoft Dynamics GP user, Snead turned to AppExchange partner Scribe Software to help him integrate his Salesforce CRM applications with his Dynamics GP ERP suite.

/zimages/4/ announces record customer increases and revenues. Click here to read more.

Not that he didnt look to Microsoft first. "Microsoft has their Integration Manager module that is a little behind the times," said Snead, in San Diego. "There were some built-in aspects to the way it could connect to our sales orders, but we werent allowed to control the distribution [to our general ledger], which is important for us."

Snead said Microsoft also has a higher-end integration tool that he looked at, but quickly realized that with limited IT resources, he didnt have the capacity to implement a bigger integration tool. "It would have taken a lot of development time, and we didnt have the resources to pay for a consultant," said Snead. "Then Scribe came along, and their Dynamics [integration] module is built on the same technology platform as Salesforce. … We do a lot of customization on Salesforce, and we do integrate. And its real easy to link."

Next Page: The quiet giant.