Saturday, July 15, 2006

The beginning of the end for SAP

As someone associated with Oracle, I couldn't help but poke fun at the recent SAP results. SAP's application business grew at a meagre 8% whilst Oracle grew at 83% during the same period. I know some of you would argue that most of Oracle's growth is inorganic but if you compare the growth by the individual constituents, it is still higher than what SAP managed to achieve. So what do you make out of this. Did SAP lose business to Oracle? Did some of the big deals slip into the next quarter as their CEO pointed out or is it that Companies have realised that Oracle just makes better applications?

I for one think that people around the world are realising that SAP's apps are too difficult to implement and upgrade. The worst part is that, during upgrades, customers have to buy the same features that they already have. (I mean upgrades to mySAP ERP etc). As a testament to this, only a few percentage of their install base are on their latest versions which is a shame. The world has also started believing in open standards and the value that brings to them. SAP's apps are these huge monolithic, fragmented ones built on propreitary technologies like ABAP. It costs a lot to hire such skilled professionals from the market. At the same time, Oracle's apps are standards based and even a kid out of college can code in Java.

Where do we go from here? I think if Oracle could manage to string one more strong quarter, it will set a trend and momentum for them. It will be a huge psychological advantage and we can see Oracle stealing more deals from SAP. As one of Oracle's top executives pointed out, 'if Oracle Fusion works in it's very first version, we will be the numero uno in this industry..period..'.


Sai Prasad said...

Nice writeup, Gopi. Nice things apart, Oracle and SAP both are plagued with their own problems. For Oracle, (in my opinion) performance and UI are key things they have to work upon. The current level just won't work going forward. Maybe, as you've quoted, it all boils down to how Fusion shapes up. I guess the stage is set for a good showdown. Let's wait and watch :)

Gopi Don said...

I agree with the UI part. It's not good. However the R12 UI is really good. An internal project has been launched to change the LAF a bit. It's now all bluish. Performance...hmmm..well it depends on how good u guys implemented it. Don't blame it on Oracle alone. In fact, according to one of the recent surveys, Oracle scales better than any other.