SAP beats Oracle? Oracle surrounding SAP? Microsoft raking in new customers?

Who’s winning what and does anyone really care?

SAP just turned in a great quarter, one that, according to my favorite financial analyst, Charlie di Bona, cemented his contention that “SAP continues to compete aggressively against ORCL in the applications market.” It also proves, di Bona, that SAP is growing twice as fast as Oracle, despite Oracle’s acquisitions.

Of course, this follows Oracle’s recent quarterly numbers, which Oracle claims prove that its “surround SAP” strategy is working, as well as its overall acquisition strategy and its vertical industry focus. Add to that the “points” Oracle scored when SAP admitted that someone at TomorrowNow had actually stolen some information for Oracle, and it looks like the company is on a roll.

Meanwhile, Microsoft releases its quarterly numbers, which of course have nothing in them about how well Dynamics is doing other than the almost useful data point that the division had a”24% increase in customer billings this quarter.” Oh yeh, and Microsoft CRM sold 85,000 seats in the recent quarter – not a bad number, to say the least (which is what they did: say the least they could about Dynamics.)

What’s a customer, or partner, or competitor (or analyst) supposed to do with all this possibly contradictory, potentially incomplete, and definitely confusing data?

One school of thought (which I don’t subscribe to) says that customers don’t care about financial performance, that they never ask analysts these questions, and that as long as the company is big enough financial performance shouldn’t matter.

Another school of thought thinks that financial performance is the be-all and end-all decider of value, and that how well a company is doing can be discerned solely by looking at its stock price and financial health. I’m not buying that one either.

And somewhere out there is my school of thought (it seems like a one-room schoolhouse sometimes), where comprehensive product and strategy analysis is married to financial analysis to come up with a big picture view of how well a company can meet its customers’ needs. And, in my little school of analysis, here’s how you can parse the Oracle v. SAP v. Microsoft world today, based on a synthesis of financial and product/technology analysis.

Oracle is building a strong product portfolio, and is making plenty of money, which means that it isn’t going away any time soon (but you knew that.) It also means that it has a major challenge to rationalize that portfolio, and from a financial standpoint, that rationalization may not really be happening. But no matter, at least in the short run: from a product/technology standpoint, Oracle is doing much better at making products that customers want to buy than many (myself included) thought they could do, acquisitions and market constraints considered.

Is Oracle beating SAP? I believe Charlie’s analysis: Not as much as they say they are. Does it matter? Yes, to the extent that this competition is raising the bar for everyone, and giving customers more choice than they would have had otherwise.

And how is SAP doing? It looks like SAP is doing better than the market, and its stock price would indicate. But it has a major challenge in that its A1S product promises to disrupt the current momentum: how that disruption will settle out (positive or negative) remains to be seen. A1S could be the next great market move by SAP or it could be a major distraction that dilutes its current brand and confuses its customers. Finessing this will be tricky (and if you wait to see how it comes out by waiting for the trailing financial results, you’ll have missed the boat.)

So, is SAP beating Oracle? Yes and no. They’re beating Oracle in the field more than Oracle would like, certainly enough to ensure that Oracle has to work hard to keep up, and Oracle is doing just that. But there’s a strong “no” side as well: The public perception is that Oracle is kicking SAP’s kiester, and SAP is so far not doing as good a job as it could in proving otherwise. But fundamentally, if you stay away from the pure financial analysis school of thought what you see is a good horse race against two strong horses, with a long field ahead and no guaranteed winner.

And wither – or is it whither – Microsoft? Well, now we’re in real limbo land. We know that Microsoft is doing some fabulous things – OBAs, Titan, growing the partner stack – that are going have a major impact in the market. We just can’t judge what that impact will be. Two data points versus the plethora of filings and comprehensive analyses that Oracle and SAP shower us with means that Microsoft is really harming its own standings in the market. And that does matter to customers: By keeping its position in the race purposely obscure, Microsoft makes no case for real market momentum, and begs the question about how well its strategy is really working in the marketplace.

The faith-based information flow about Dynamics’ long-term strategy – based largely on Steve Ballmer’s continued, and growing, endorsements – can only go so far against the real analysis that can be done about its competitors.

So, in the end what’s important is that real competition is lighting up the market, and rather than being a zero sum game, the Oracle v. SAP battle is looking like it may be expansive for everyone. What’s important is that they both winning and losing, simultaneously, depending on which perspective you care to take. That’s not waffling either, that’s the reality of the complexity of enterprise software today. Too bad Microsoft doesn’t want to – or dare – line itself up in the same way. Maybe there’s a good reason, but from here it looks like a losing position, all the more ludicrous for a company that might even be a winner.