Oracle, SAP: Can they prove their SaaS chops?

Oracle, SAP: Can they prove their SaaS chops?

Summary: Oracle and SAP, two giant predominately on-premise ERP vendors, are at an interesting crossroads where both will be talking more about software as a service and trying to prove their cloud chops.


Oracle and SAP, two giant predominately on-premise ERP vendors, are at an interesting crossroads where both will be talking more about software as a service and trying to prove their cloud chops.

On Wednesday, Oracle held a webcast about Oracle Fusion HCM. Fusion, Oracle's next-gen application suite five years in the making. The talk, hosted by Steve Miranda, SVP applications development at Oracle, was largely an infomercial, but there were a few key nuggets about Oracle HCM worth noting. You can thank me later to listening to the Webcast so you don't have to.

Among the key points:

  • Oracle Fusion HCM and CRM will be delivered with SaaS as an option.
  • Fusion HCM will have a single code line through on-premise applications to SaaS.
  • And Fusion HCM will be slivered as single tenant and multitenant SaaS.

The big followup there is what single tenant will cost. As SAP's grand Business ByDesign effort showed single tenant can be costly.

If you cut through the customer chatter for the Fusion early adopter program the realization is that both Oracle and SAP have to talk in SaaS terms. Miranda talked security, uptime and other SaaS basics---as well as the fact that Oracle's business today is mostly on-premise implementations---but the reality is that Fusion HCM is going up against SuccessFactors, Taleo and Workday.

Given that fact, it's no coincidence that Fusion CRM will also have a heavy SaaS component. Oracle has Siebel On Demand, but more often than not is duking it out with Oracle customers can go with Fusion in modules, but those software nuggets will likely compete with a SaaS offering.

Simply put, Oracle needs to get its SaaS game down and it's a different animal than on-premise. As noted in Forrester Research's Oracle negotiating tips, the company focuses on selling to CEOs and CFOs. The tech exec usually gets handed the Oracle implementation.

The SaaS game is different. HR folks make the SuccessFactors call. Your chief marketing and sales wonks go with Salesforce. CIO? What CIO?

On the SAP side of the equation, the company will spend a lot of time at its Sapphire conference next month talking about its on-demand street cred. The issue: SAP just lost John Wookey, the big name tech veteran who was a key cog in the company's SaaS efforts.

Dennis Howlett talked to Wookey---and SAP executive vice president Peter Lorenz---Wednesday and the big takeaways are:

  • Wookey wanted to spend more time with his family.
  • The SAP on-demand development teams will stay intact.
  • Those teams are still shocked Wookey is leaving.

Howlett's take:

I’m not sure how SAP will make this work. Many of the lead developers bringing Sales On-Demand to market are based in Palo Alto, while the ByDesign teams are based in Walldorf Germany. Holding those two very different cultures together will require a very strong leader. Right now, that person is not in post. However, Peter Lorenz’s life might be made easier by the fact that Hasso Plattner, co-founder and still a driving force behind development, is very much in favor of the newer styles of development exemplified by the On-Demand team.

Wookey will stick around as a consultant, but SAP's task is clear. The company has to reassure folks that it is serious about SaaS. Oracle is coming at SaaS from a different angle, but the chore is pretty much the same.

Topics: Data Centers, Cloud, Emerging Tech, Oracle, SAP

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.


1 comment
Log in or register to join the discussion
  • Looking in the Rearview Mirror

    I missed the webcast today, but caught yesterday's. Thanks for watching and reporting so the rest of us sinners didn't have to. I took away the same thing you did, in that Oracle is definitely putting the SaaS HCM/HRIS providers in their scope. The adoption rates of the above mentioned services have been very rapid and that has to be very nerve-wracking to the existing big box ERP vendors.<br><br>I can see a market open for hosted Fusion HCM apps in the multi-tenancy model, assuming Fusion HCM can hold it's own against SuccessFactors, et al. Quite a few years ago, we considered providing our own SaaS HCM offerings using EBS as the foundation, but we decided against it at the time as it just didn't seem like the right fit at the time. I must say that we are seeing some exciting things in the talent and performance management space from the Oracle side, so we will see how it performs in the real world.<br><br>All of the major ERP vendors should be concerned about the SaaS providers, as there is a lot of love for them in the respective areas of HCM and CRM, as you noted. They can see them in their rearview mirror.