SAP Takes A Swing at Oracle
SAP has been hinting and mentioning and otherwise suggesting that it is taking away customers from Oracle's much vaunted Hyperion product line, and now it has issued a formal press release to that effect. While the press release talks about over 100 Oracle customers choosing SAP products over Hyperion, the backstory is perhaps even more interesting: SAP is starting to get aggressive about marketing against the ultimate marketing machine, Oracle, and that represents a significant shift in SAP's position about how it positions itself in the market.
In my last conversation with Oracle about this subject, at the beginning of the month, they denied being aware of the loss of more than 100 Hyperion customers to SAP. And they added that they had seen a number of wins in the SAP customer base using Hyperion....Which makes this the kind of he said, she said argument that's hard to resolve without a little more knowledge. SAP's press release did mention seven companies by name, and SAP told me that they would have named more if they had permission from customers to do so. Having watched this story growing inside SAP for several months (it was first mentioned at the SAP Analyst Summit last December), and knowing how cautious (annoyingly so, at times) SAP is about this kind of competitive positioning, I'm going to give SAP the benefit of the doubt that they have done what they said. Does this represent a net gain of 100 customers over Oracle? That's hard to know, for anyone, including SAP and Oracle. But the damage is there in the perception that the largely invulnerable Oracle has a chink in its armor.
As I said at the outset, what is even more important is that SAP is not only being aggressive but also boasting about it. And trying to hit Oracle where it hurts. After all, Hyperion is a major structural feature in the "surround SAP" strategy at Oracle, and to even hint -- much less say outright -- that the strategy isn't hitting the mark is to play Oracle's hardball game on its own turf. It's supposed to hurt, and it probably does.
I'm expecting a retaliatory move from Oracle any moment, so don't think this matter is settled. But it highlights not only what the stakes in the rivalry between these two sworn enemies are but also the value of analytics and performance management in the larger enterprise software marketplace. Both companies -- as well as IBM and Microsoft -- have made significant acquisitions and investments in analytics, performance management, business intelligence, and the like, and every one of these companies is now in the position of having to make good on their investments in a big big way. What's interesting about SAP's Hyperion wins is that they had nothing to do with Business Objects technology -- all of them were recorded before the acquisition was complete. So the folks at SAP are promising an even stronger position vis-a-vis Oracle as the BO product line starts to make its way into the hands of SAP's sales force.
How this will all end with respect to Oracle's and SAP's market position is anyone's guess at this point. But I think it's healthy to see a little balance restored in the marketplace of ideas: the onus is now on Oracle to prove that it's gaining ground on SAP, and I can't wait to see what they come up with. Not just because it provides fodder for this and many other blogs, but because it charges the companies' respective customer bases with a little skepticism and some healthy doubt about how one-sided any part of the enterprise software market is at any given time. The rivalry between SAP and Oracle is complex, nuanced, and constantly evolving. Today we saw another example of how this statement becomes more true with every day.