The Battle of the Ecosystems: SAP vs. IBM vs. Microsoft. And Then There's Oracle

Summary:SAP made a series of announcements from Amsterdam today highlighting the growing strength of its partner ecosystem. They made an investment in a partner – ArisGlobal – pulled together their SMB partner program under a new name – PartnerEdge – and otherwise immortalized existing partners such as Callidus and Visiprise in press releases and presentations.

SAP made a series of announcements from Amsterdam today highlighting the growing strength of its partner ecosystem. They made an investment in a partner – ArisGlobal – pulled together their SMB partner program under a new name – PartnerEdge – and otherwise immortalized existing partners such as Callidus and Visiprise in press releases and presentations.

Why all the buzz about partners? The partner front is the new flash point in the battle of the ecosystem. When it comes to IBM vs. Microsoft vs. SAP vs. Oracle, it turns out that a large coterie of happy, incented, and otherwise engaged partners that are out legitmizing an ecosystem vendor’s ecosystem – and selling the products and services they develop that fill in that ecosystem’s white spaces – has become a major competitive weapon. And SAP is absolutely committed to making the most of this weapon in their four-way fight against their partner/competitors IBM, Oracle, and Microsoft.

SAP isn’t the only one working the ecosystem angle: Microsoft Dynamics' ERP group has its Industry Builder program, which is trying to provide better support for a partner ecosystem that traditionally has been more adept at providing local, very customer-specific solutions – and now needs to provide these same solutions in support of much larger, and more geographically distributed companies. IBM has also proven relatively adept at building a partner ecosystem, thanks to the golden handshake that IBM Global Services can provide: Wouldn’t you like to partner with a vendor that can direct a few thousand top notch consultants towards your product, and make them a sales channel as well as an implementation resource?

IBM and SAP have added an important twist to their ecosystems efforts, one that does more to get the partner community’s attention than just about anything else: they buy their partners. IBM’s recent acquisition of MRO software is just the latest in a series of partner acquisitions they’ve made in recent years. SAP’s acquisition of Virsa last spring was a watershed event in Silicon Valley, and made SAP the best friend of every VC around.

What about Oracle? In the run-up to their big Open World shindig next week – where we can expect to hear a lot of crowing about the solidification of their market position and their growing revenues from enterprise apps – the ecosystem play is still a glaring weakness. The buzz in the enterprise apps ISV community is clearly not about Oracle, despite that company’s massive partner program. When you compare the IBM model – surround you with consultants, and maybe even buy you – and the SAP model – maybe invest in you and maybe buy you – and even the Microsoft model – we’re Microsoft, wanna sell to 450 million desktops?  – Oracle falls a little short.

It’s not that Oracle lacks the technology, far from it. It’s that they lack the focus on building a partner community with the same vim and vigor that the competition is applying to the problem. Sure, if you go to Open World, you’ll see more partners – largely database and middleware partners – than you might see at any other show. But you won’t see the clamor, the “partner with me” excitement, from the enterprise apps gang that you see in Oracle’s competitors’ ecosystems. Not yet, anyway.

It’s a potentially major weakness – though it’s one that can be fixed pretty quickly. (SAP was a terrible company to partner with only a short couple of years ago). And maybe we’ll see some action in this regard at Open World. But absent a similar approach to partnering, Oracle’s gains in enterprise apps revenue look relatively vulnerable. Not this quarter and maybe not next quarter either – ecosystems take a while to build. But once the momentum is there, a big ecosystem is like a locomotive with a good head of steam: damn hard to stop. And right now, the ecosystem train has left the station, and Oracle is running on foot behind, losing ground all the time.

Topics: SAP

About

Joshua Greenbaum has over 20 years of experience in the industry as a computer programmer, systems analyst, author, and consultant. In addition to his work from various bases in Silicon Valley, he spent three years in Europe tracking the enterprise software market as an analyst and correspondent for leading industry publications. Josh is... Full Bio

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