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

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.

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TOPICS: SAP
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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.

Topic: SAP

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  • Avoiding ecosystems

    Software that is an ecosystem is advancing by Darwinian evolution. Keep throwing different things and those that don't work die.

    Human progress has normally progressed by scientific means - so we learn and understand the current state of knowledge and then make progress based on that.

    So software ecosystems are to be avoided in favour of software that is based on a sound theoretical background.

    Life was created by evolution. Software should be created by intelligent design.

    As a Chinese proverb puts it: "Even a fool learns from his own mistakes, a wise man learns from the mistakes of others too".
    jorwell
    • This is about selling...

      ... and not software. The best software may not win if the seller is inefficient.

      Here's a quote about how to obtain partners, for example:

      "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."

      There's more for a potential partner who wants to sell out than for one who wants to evaluate the software.


      Human progress has been driven by many non-scientific motives, and I'd say most big advances within science have been unexpected, either in timing or content or both.

      When Edison was inventing by carefully planned experiment it was front page news. Imagine reducing innovation to process...
      Anton Philidor
      • To be creative

        You need lots of ideas.

        You need reason to cut out the ideas that are unworkable before you even think about starting work on them (life is too short!).

        But you're right, ecosystem is a marketing phenomenen. Let's see how many minds can be infected with the IBM, Oracle, SAP or Microsoft virus.

        The term ecosystem always makes me think of what you might find when you overturn a large stone.
        jorwell
  • Evolution? HAHAHA!

    Life was 'created' by evolution. Evolution is a religion not based on the facts. "This website brought to you by chance! Once upon a time (it always starts like that - and don't forget the "long ago"!) a "big bang" happened. Then "soup" came. Then Out Of That Soup (etc. etc.) suddenly a *LIVING CELL* evolved and decided it wanted to be - let's choose a Hamster!. And it also created this website as a byproduct. No truly!
    nizuse
  • Ecosystems are a means to an end

    A look at the future and you may see a different model in supply of business solutions. The first ?myth? to be exposed is the concept of ?Enterprise Applications? ? there is no such thing ? organisations do not work that way. What you have are these large players employing thousands of programmers pumping out hard coded applications covering a wide variety of functions. These applications use their proprietary technologies and rarely reflect the way business works. The other ?E? associated with enterprise is ?expensive?.

    What is happening now is that almost all such core-enabling technologies are a commodity with wide choice including open source. This removes the edge these large companies have exploited in the past. We are now beginning to see that business knowledge and what is best for the customer beginning to emerge. The one area that still has to be recognised is the impact of separation of business logic and fundamentals from delivery technologies.

    Business is actually quite simple but IT, driven by these industry giants, has made it complex by mixing the ?I? for Information with ?T? for Technology. The challenge to solve the separation is on the agenda and pioneers have already made substantive progress. This capability will change the landscape, be ?disruptive? and take business software to a mature model, which is long overdue.

    Where will this leave ecosystems? Smart front line players will grasp the opportunity to build custom solutions quickly with valuable IPR staying with them and/or their customers. The large conventional IT suppliers will be forced to change even move to the front line themselves ? a familiar story? IBM have made that move with their acquisition of PwC consulting and in the shorterm securing their ecosystem by acquiring ?partners? with local and or vertical knowledge. The real challenge is going to be around price and cost base ? the entry price to custom application build will be dramatically lower ? this will favour smaller local suppliers whose reliance on being ?feed? by the ecosystem will eventually disappear. Ecosystems are a means to an end not an end in their own right. They are a natural transition in the evolution to maturity but not sustainable in long term as history has already shown. The real winner - the customer.
    David Chassels