SAP v Oracle: Battle of the ERP Giants: Page 2
One area where she sees a real ERP battle forming, however, is in human capital management (HCM). That’s why SAP bought SuccessFactors and why Oracle has developed Fusion HCM.
“Over time, both Oracle and SAP have seen software-as-a-service HCM players, particularly in the talent management area, start to make inroads into their installed customer bases,” she said. “As an aside, something similar has been going on in the CRM market where Oracle and SAP customers are moving to Salesforce.com and to Microsoft – and you’ve seen part of Oracle’s response with its recent purchase of RightNow.”
Summary: They each have pluses and minuses, but they are too well matched to predict a victor any time soon.
Best Pound-for-Pound Champion
Rather than looking at tactics and emphasis, Eric Kimberling, an analyst with Panorama Consulting, took a statistical approach to the matter of who is the true ERP heavyweight champ. In simple market share, SAP leads with 24 percent, with Oracle not far behind at 18 percent, according to Panorama research. When it comes to bids and quotes, Panorama found SAP makes the short list more than the others – 38 percent of the time. But Oracle wins more bids when it makes it onto the short list compared to SAP.
In terms of customer satisfaction, Oracle has the highest rate at 80 percent compared to SAP at 39 percent. SAP also takes an average of 13 months to implement, two months longer than Oracle. And Oracle comes out a little cheaper than SAP measured by total cost of ownership.
But while SAP may be more expensive, Kimberling said that it has the lowest average cost overrun (8 percent over budget), with Oracle at 15 percent. To his mind, that means while SAP users may spend more, they generally have a better sense of what it takes to implement ERP and budget accordingly.
Summary: Both fighters have their strengths and weaknesses, but there is little to make either an obvious choice over the other.
While recent product releases and acquisitions may have gained the spotlight, both Oracle and SAP are thinking several years ahead in their attempts to unseat the other and land the final knockout blow. Both sides may have been a little slow to the SaaS party, but they are moving fast to catch up. And both are in the midst of a complete revamp of their product offering.
“Both companies are trying to reinvent themselves with their responses to Big Data,” said Martens. “SAP with HANA and Oracle with all its Exa- offerings.”
Each has embarked upon ambitious programs to redesign their underlying architectures. Oracle’s Fusion program, which has been going on for five years, is resulting in a steady rollout of middleware and applications that cover the enterprise spectrum. When fully completed, the company sees this as the enterprise suite of the future. It will be able to run in the cloud and on premise. Rather than being underpinned by a myriad of programming languages and complex middleware, it is based on Java with standardized middleware and baked-in analytics.
SAP, too, has been working diligently on its HANA analytics project, which it sees as a key element in its platform redesign. The company is in the process of refactoring its applications around the HANA in-memory computing engine. It’s all about speed of information access and dealing with an ever expanding amount of data. Similarly, its Business ByDesign is an SME-oriented cloud-based ERP product with built-in analytics.
“SAP has become more cautious on the rollout of Business ByDesign while Oracle positions its Fusion applications more in a coexistence and complementary role to its existing apps – E-Business Suite, JD Edwards, PeopleSoft, and Siebel as well as its more industry-specific apps – rather than an all-out replacement for these apps,” said Martens. “SAP only has the one enterprise offering – Business Suite – which it offers in a variety of industry flavors – hence its focus on industry ERP acquisitions as tuck-in purchases.”
Conclusion: This contest is far from over. Both fighters have dominated individual rounds but they are well matched on the judges’ scorecards. It’s unclear as to whether a knockout is in either company’s future.