Oracle Rivals Circle the Wagons
Updated · Dec 14, 2004
The greatest impact of the Oracle/PeopleSoft mergermay be its effect on other software companies — not customers, analysts say.
Large and small software providers must now learn how to best deal with an Enterprise Resource Planning (ERP) world dominated by market leader SAP and the marriage of Oracle and PeopleSoft.SAP, Microsoft and IBM activated contingency plans even before the U.S. Department of Justice’s antitrust case was decided.Smaller players like Lawson, Fidelity Employer Services Company (FESCo), Accenture and EDS have also announced efforts to work with larger players and/or provide specialized services for the human Resources and financial services sectors.Still, analysts like Philip Fersht, who leads Yankee Group’s Business Applications Group, expect additional mergers and acquisitions in technology markets with Siebel Systems and BEA as probable targets.”I would expect to see IBM go into the apps game with a Siebel acquisition or BEA,” he said. “I just don’t think BEA can now stand up to Oracle if it acquires PeopleSoft. With IBM and BEA, they could focus on the integration space and middleware.”
The highest priority process area, according to fellow Yankee Group analyst Mike Dominy, will be a new breed of supply-chain management called “network supply management.”
“The overall market for technologies used inside the enterprise is mature,” Dominy said. “With few exceptions, the opportunity to sell technology used solely within the four walls of a company has passed. Naturally, there will be exceptions by industry, such as health care and public sector, and sporadic technology spending driven by regulations or compliance initiatives, such as Sarbanes-Oxley.”
Network supply management also favors the larger players, according to Dominy, which have software, sales and support staff to pull off the complete offering.
Fersht adds IBM is getting aggressive with its business process outsourcing, where the Armonk, N.Y.-based computer giant provided high level services around PeopleSoft software human capital management software.
A perfect example of this is the joint $1 billion, five-year partnership that bundles WebSphere middleware in every future shipment of PeopleSoft products. Big Blue followed upwith an additional five-year partnership with Siebel Systems to advance its vision of on-demand customer relationship management (CRM) and Business Intelligence software.
“When we looked at what IBM wanted to do, all we could tell is that they want to sell WebSphere to more customers. The IBM partnership is more about controlling 70 percent of the Human Resource software market,” Fersht told internetnews.com.
Dominy notes that SAP is a winner, because even though it will compete more fiercely with fewer players, the battle between Oracle and PeopleSoft allowed SAP to quietly peel off more market share. The German-owned firm has kept a low profile for the most part with only the product release such as the latest version of SAP Business One for small and midsize businesses and the occasional customer win like its estimated $35 million contract to replace aging software at the U.S. Postal Service.
SAP’s success could also help Microsoft in its pursuits to grow beyond its mid-market presence, courtesy of its Great Plains platform. Beyond Microsoft’s one-time plan to consider a merger with SAP, the two companies have applications that already compliment each other, including Microsoft’s Biz Talk server with SAP’s connectors as well as SAP’s NetWeaver support for Microsoft .NET products and smart client technology. But Fersht also noted that Microsoft is the largest Web services provider hands down, which is of great interest to SAP.
You can read more about Oracle ERP here.
Michael Singer is a career coach, podcast host, and author to help you step into a career you're excited about. Currently, He is a coach and trainer helping entrepreneurs and executives achieve business and leadership success. He is also an award-winning business journalist focused on the intersection of technology, Big Data, Cloud, SaaS, SAP, and other trending technology.