Tuesday, June 14, 2005

Brawl continues between Oracle and SAP

There's no end to the entertainment value of the Oracle/SAP feud.

SAP picked the fight back in January, with a pitch for PeopleSoft and J.D. Edwards customers to jump ship from Oracle, with a so-called "Safe Passage" program for SAP customers that are also running PeopleSoft or JDE. As part of that program, SAP acquired a third-party PeopleSoft/JDE maintenance and support organization, TomorrowNow.

Oracle CEO Larry Ellison responded in February with a threat to SAP, regarding Oracle's intellectual property rights.

SAP's Leo Apotheker answered back two weeks later, referring to Oracle's Project Fusion (its initiative to merge its three product lines) as "Project Confusion."

Then, rather than backing down, SAP in April expanded its Safe Passage program to extend the offer to all PeopleSoft and JDE customers, whether or not they are customers of SAP.

In this middle of all this, SAP announced its friendly takeover of retail software vendor Retek and Oracle promptly launched an unsolicited counter-bid and started a bidding war with SAP, which Oracle eventually won.

The latest round
Which brings us to today. The latest attack is from Oracle, which is now offering a new program, Oracle Fusion for SAP, or "OFF SAP." Under this program, Oracle will offer SAP R/3 customers a license credit of up to 100%, to switch from SAP to Oracle apps. Furthermore, Oracle's consulting organization is offering a free SAP migration workshop to help clients plan the migration.

In the press release, Oracle's President, Charles Phillips, talks some trash about SAP.
Ninety-four percent of Oracle E-Business Suite customers are running on the latest applications -- Release 11i. SAP, however, seems to be requiring customers to re-license their applications to upgrade to SAP's latest technology. Only 6% of SAP's customers have upgraded to mySAP ERP, according to a leading analyst firm. Now they have a low cost alternative to stop paying for upgrades and get OFF SAP.
Phillips makes an interesting point. If true, it is not a good sign for SAP. I've put in an inquiry to Oracle to find the source of these statistics.

What it means for customers
Apart from the entertainment value, there is a serious fight for customers going on here. Many large enterprises have committed to either Oracle or SAP as their standard applications platform. This battle is not really for those customers. The fight is for those large organizations that run both Oracle and SAP--often because of a history of acquisitions and mergers. Such companies are up for grabs, and many are in the position of trying to decide, long term, which platform to favor. The stakes are high for both vendors, as the current battle shows.

Companies that are still in the process of deciding on a strategic platform should take advantage of the offers of both vendors and strike the best deal that they can now. Name your price. Your leverage will never be stronger than it is today.

Related posts
SAP expands grab for PeopleSoft and JDE customers
SAP slams Oracle's strategy as, Project Confusion
Ellison threatens SAP regarding PeopleSoft support
SAP to provide maintenance for PeopleSoft products
Bidding war: Oracle fighting SAP over Retek

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