Enterprise software giants start great cloudify effort

Enterprise software giants start great cloudify effort

Summary: If Oracle and SAP can gobble up cloud players there will be evolution not revolution.


Oracle bought RightNow. SAP acquired SuccessFactors. And it's likely a few other cloud-related companies will be coming to a software giant near you. What remains to be seen is whether these cloud acquisitions really change anything or just ensure the giants keep their stranglehold on the market.

SAP's $3.4 billion acquisition of SuccessFactors is notable on many fronts. First, SAP paid a 52 percent premium to bolster its cloud efforts. In addition, SAP is taking Oracle's playbook, which revolves around buying companies that could cannibalize their traditional businesses. Meanwhile, SAP is putting SuccessFactors CEO Lars Daalgard in charge of all of its cloud efforts.

Related: SAP acquires SuccessFactors for $3.4 billion: Cloud consolidation accelerates | SAP acquires SuccessFactors: a first take | Oracle acquires RightNow for $1.5 billion, aims turrets at Salesforce.com

Rest assured that SAP and Oracle see the cloud threat and opportunity. The large enterprise software model goes like this: Buy the threats and as customers move to the cloud you're set with an offering. If Oracle and SAP can gobble up cloud players there will be evolution not revolution. Evolution is much friendlier to the software maintenance model.

Dennis Howlett noted that SAP's decision to keep SuccessFactors separate was a good move.

Keeping SuccessFactors separate is a very smart move because it keeps the on-premise and cloud businesses in their own worlds. Mostly.

Add it up and the recent cloud acquisitions Oracle and SAP really revolve around controlled cannibalization. By acquiring SuccessFactors, SAP actually gets a few lost HR customers back.

What remains to be seen is whether SAP and Oracle can retain SuccessFactors and RightNow workers, respectively. Oracle and SAP are buying cloud expertise as much as products and services. Another wild card revolves around whether these enterprise giants will actually do anything with these cloud architectures they just acquired.

There are still cloud revolutionaries---Salesforce.com and Workday--- knocking on traditional enterprise customers' doors, but plenty of software as a service outfits will sell out to Oracle and SAP. This upcoming barrage of cloud acquisitions ultimately be disheartening to IT buyers. The cloud was supposed to break down the enterprise application duopoly. Instead, customers are going to get the Oracle-SAP duopoly for the foreseeable future.

Other voices on the deal:

Topics: SAP, Apps, Banking, Cloud, Emerging Tech, Enterprise Software, Oracle, Software, Software Development

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  • Another subtle pro-cloud push

    I never stop being amazed at the subtle (and not so subtle) on-going efforts to push the populace into using the Cloud whether they like or even want to.

    In days past it was relatively easy to subtly push the general public in any one direction. However with the advent of the internet, social media and live communication overall (which I imagine was something not foreseen by the backers of pushing the internet to public usage) it???s getting harder and harder to do this as people are more and more questioning why they should do what mass media and the corporate world tells them they need to.

    The cloud push effort will not be as easy as previous similar global moves. With any luck the populace will see the dangers of it and either force the corporate world to do something about these and make the Cloud a choice amongst non-cloud choices or say no and watch the cloud fall to the wayside.
  • RE: Enterprise software giants start great cloudify effort

    Nothing needing information security is ever going to be placed in the cloud as long as there is a Patriot Act. It might not happen even if the Act dies. Giving others the control of your, say, secret industrial research, is a bad, bad idea. I can however see huge advantages for something like multiplayer video games, and other types of entertainment programing.