SAP and Oracle: the knives are out

SAP and Oracle: the knives are out

Summary: SAP and Oracle are at each other's throats. It's a titillating side show that side steps some of the realities - at least for SAP.

TOPICS: Oracle, Browser, SAP

Oracle Open World is an event I am passing on this year. Too much long distance travel the last months combined with a need to be at home while builders rip it apart means I don't need to feel bad about missing OOW.

But it doesn't prevent me from observing the keynotes via the Internet delivered livestream or, for that matter miss the thinly veiled attacks coming at Oracle via the Tweetstream and the advertorial SAP contributes at Forbes. It's worrying.

Ever since Henning Kagermann was at the helm, SAP rarely if ever publicly dissed the competition and especially not Oracle. It was something that distinguished the company in the public domain and was to SAP's credit. Why? While the antics of Silicon Valley CEOs may be entertaining fodder for media types and insiders, buyers don't give a crap. If anything they find such things confusing. From my perspective, I'd much rather see a company talk up its own accomplishments with customer case references than have to put up with the childish bickering and sniping that characterizes so many quarterly results calls and,increasingly, customer conferences.

That doesn't prevent SAP execs seething internally but at least in the public domain, having a public 'go' was off limits. OOW seems to be heralding a new reality.

Take this piece from hack turned flack Bob Evans entitled Oracle President Safra Catz Suffers SAP Hallucinations where he says (among other things):

Here’s the direct quote from Catz via my transcription of a video taken during the session by a blogger known as “The VAR Guy” and who first publishedCatz’s fact-challenged contentions:

“You know, um, there’s the folks at SAP, which, I have to tell you, we started Fusion Applications—which I think you got shown today—we started, like, six years ago, or something like that? They’re still selling products they built—what—20 years ago? 17 years ago? They haven’t even—as far as we can tell—they have not even started building modern systems! So, you know, I’m gonna starting getting into real trouble—no—I’m—okay—well, you know—and then, of course, there are our good friends in Redmond.”(End of excerpt—Catz then goes on to shoot some arrows at Microsoft.)

Now, I would bet that the vast majority of the world’s leading companies that run their businesses on SAP software would be shocked to find out from a top Oracle exec that SAP not only has no modern software, but that SAP hasn’t even begun building any modern software.

OK - so Catz is engaging in the kind of truth bending one expects of senior Oracle execs but then Evans goes off on a mad tangent declaring:

If Safra Catz believes what she said, then one of the top three executives at one of the top 10 technology companies in the world needs to get her hands on some better competitive analysis. I’d also recommend that she spend a few minutes either (a) talking to her salespeople who compete with and lose regularly to SAP; or, (b) checking with some market analysts who follow SAP; or, (c) surfing this newfangled thing called the Internet to see what discoveries she might unearth about SAP’s massive set of new, modern products and technologies.

Let's pick this apart:

1. Lose regularly? Really? I suggest Evans does a bit of digging of his own and I think he'll find that there is a certain amount of 'swings and roundabouts' on this one - when either company isn't losing to or suffering attrition to the likes of or Workday, that is.

2. Checking with market analysts - well, some people think I'm one of those though I don't take that title to myself. But I spend a LOT of time in conversation with other accredited analysts and they all say the same thing (roughly): SAP is great at putting out visions of grandeur (as is Oracle) but at the end of the day it is about consumption. If Evans check the job boards at IBM and Accenture for example he'll find there are thousands (yes thousands) of vacancies for SAP implementers for existing, in the market technologies.

3. 'SAP’s massive set of new, modern products and technologies.' This is where, as far as I am concerned, Evans is either drinking too much kool-aid or lost perspective. My colleague Jon Reed sums up the HANA thing very well when he says:

The biggest complaint of existing HANA customers I’ve heard is that HANA isn’t nearly “plug and play” enough, requiring way too much elbow grease for something called an “appliance." A deep HANA apps store would solve a big part of that complaint, so from that angle, even HANA is not immune from SAP’s ecosystem obstacles.

As some of us feared, Vishal Sikka’s Las Vegas keynote turned out to be “all HANA, all the time.” Yes, there were some big nods to mobility, but Sikka emphasized HANA as the innovation that would tie together everything SAP did from here on out. There’s nothing wrong with the idea that HANA could play a major role in SAP’s economic future – clearly in-memory will be a key factor across SAP’s entire product line (including its SME products) going forward. But based on the reports I get from early HANA projects, I believe SAP is pushing HANA too aggressively.

It is. And when Evans with another bloviating re-run of Vishal Sikka, executive board member SAP's TechEd address, triumphantly announcing:

SAP hopes to usher in a new generation of business-network optimization in which companies can do more than just share information: instead, they can collaborate in deeper and richer ways, and in real time, in a combination of processes that can fulfill such dreams as fusing supply chains and demand chains; being able to do extensive cost-and-profitability analysis instantly; planning, scheduling, and doing real-time adjustments to trade promotions; and peering over the horizon into the future with analytics tools that are inseparable from transaction systems.

In this way, these force-multiplying business networks become the ultimate manifestation of a transformational idea expressed by SAP executive board member Vishal Sikka: the liberation of high-value content (ideas, software, information) from its increasingly inflexible containers (antiquated hardware, restrictive software, outdated processes).

...I have to wonder if we were at the same conference. I guess Evans didn't listen to the interview between Bruce Richardson and Tom Wailgum at ASUGNews where Richardson said - and I paraphrase: 'We've seen nothing new on supply chain from SAP in years.' Back to Reed:

Current HANA use cases are too limited to qualify as “game changing” in my book, especially when you consider the custom heavy lifting that is often involved. This is no insult to SAP, which deserves full credit for getting HANA out the door in record time. There is every indication SAP is totally committed to making HANA all it can be, and that should be reassuring to any customers kicking tires on HANA’s capabilities.

Yes, we’ve all seen SAP co-CEO Bill McDermott making the media rounds in his inimitable fashion, (yes, I mean that as a compliment), citing the HANA pipeline as the fastest growing in SAP’s history, with close to a half billion US dollars in the sales pipeline now. But those I trust don’t believe it’s ready to deliver on that kind of volume – yet. “To reach those kinds of numbers, HANA needs apps; it needs to be much more out of the box,” one HANA expert told me. “BW on HANA in the fourth quarter is a major next step, but I think we’re still two years out from HANA as a significant revenue stream for SAP.”

Reed is being kind. Check this as representative of some confusion around the need for apps delivered as Reed suggests.

More to the point, SAP said at TechEd there are 20 HANA apps yet the whiteboard I saw only counted 17 and of those only three are working - after a fashion. SAP executives know this. Then there are HANA hardware problems. Not to put too fine a point on it, when senior 'in the trenches' representatives from some of SAP's best partners are kicking off because of hardware issues for their customers, then you know HANA, as currently iterated, is not in great shape. If Evans doesn't know about these things then I suggest he pounds on a few doors to discover the reality. To be blunt, where the heck all this 'stuff' Evans talks about is coming from is a mystery to me. It simply doesn't blend with the reality I (and Reed and others) see on the ground.

To its credit, at TechEd, SAP jumped sharply to start resolving the SI problem but it should never have gotten to that point in the first place.

Does this make what Catz said a 'hallucination?' That depends in part on how you want to look at SAP's so-called innovations. At the time when SAP co-founder Hasso Plattner was exciting the TechEd crowd talking about in-memory database, I asked if the Business Suite would ever move to (what is now called) HANA. He didn't think so because the Business Suite architecture was not designed for that style of working. Now we're told differently.

So far, the best we can hope for is 'feeds' and speeds' in analytics plus a clutch of apps that may have some wider appeal. And that's in the next year. Given the scale of what it means to redevelop a suite of the size and complexity SAP's Business Suite represents then we're looking at at least five years before anything viable comes to market. FIVE YEARS. That's in line with what long in the tooth SAP watchers expect. It's the distortions between what's real at SAP and what's a vision that make Catz sound plausible. That's what Evans fails to comprehend. At one time SAP could get away with it because it was genuinely bringing something new to the party. That ended in 1999. As I said to Sikka in one of our conversations: "In the late 90's everyone wanted to be SAP. Today, everyone wants to be"

In the meantime, Workday has quietly gotten on with the job, winning enough business to manage more than two million people with its HR/HCM solution, rolling out good enough financials plus having in-memory, real time analytics that simply work. Staggeringly well. It must be pretty good stuff because whenever I try call up Workday execs they always seem to be closing one major deal or another. That's the dividend you get when meeting current needs and not just throwing out grand visions.

You can argue then that what Catz is saying is broadly correct because the foundation upon which the Business Suite rests is coming on towards 20 years old. Yes, HANA may be the foundation for the future but it is not one that exists today. What about ByDesign? After a rough start in 2007 and a reboot in 2010, it seems to be waning from the conversation except as a solution that is trying once again to go up market. Good luck with that one folks. In the meantime, Reed and I are putting the whole SAP Community Network to the test.

But none of that contents SAP supporters. And this is where things start to get a tad rough. In the Tweetstream I noticed:

@MarkYolton: Love this blog with attitude about the "hallucinating" Safra Catz of Oracle < laughable

@Bbillwohl61#sap #oracle I've watched Catz for years. There is a reason she never smiles...cause she knows Oracle is full of it…

Those refer to Evans first piece. Ugh. Well...sort of.

But this is what I believe is the real problem - and it cuts both ways for SAP AND Oracle. For as long as they are sniping at one another they're missing the real threats which are coming from the pure play cloud vendors plus those who understand the quantum value of delivering real-time data in context. Not just more analytics albeit at 'the speed of thought.' That's not enough.

The counter argument to all of this is that SAP (and Oracle) set out big visions that its customers will buy into...eventually and is, therefore to be applauded. That's entitlement thinking. I don't believe that is as true as it once was. Having watched the pace at which in particular has built a thriving ecosystem of developers and is clearly feeling its way up the food chain, having observed the meticulous manner in which Workday is delivering value (think TCO at 50% cost of SAP/Oracle) and good will for a relatively immature solution set and having also seen how a new breed of fast paced SIs are swooping on opportunity, I wonder, like Reed, whether SAP is even in the same ball park.

More pointedly, in conversations with one of SAP's biggest customers, I learned that it is streets ahead of where SAP is on mobility and situational applications. Its not hanging around waiting or platforms or appstores to emerge from the new SAP. The pace of change is such that SAP customers will not wait for them to solve what are SAP's real issue - an incumbency that drags on its ability to move quickly in the big areas that matter. When SAP solves those problems, then I'll start to believe what Evans and others are saying.

The troubling thing is that SAP knows all of this and more. It continues to wrestle with the past while looking to the future. Like Reed, I can only hope it overcomes the problems which are largely of its own making in time to remain relevant. Those hefty maintenance fees won't last forever and HANA's initial allure is fading rapidly.

In the meantime, two Tweets kind of sum it up for me from this morning:

@jamesy_boy: @dahowlett @steverumsby SAP Browser support is an utter nightmare. They would have much more love if they stopped using JavaScript !

@santiagojreig: @jpenninkhof: @dahowlett / @dgraversen vid about dev licenses. IMHO things got worse in 3 years instead: <- agree!

'nuff said.

Disclosure: both SAP and Workday have been clients.

Topics: Oracle, Browser, SAP

Dennis Howlett

About Dennis Howlett

Dennis Howlett is a 40 year veteran in enterprise IT, working with companies large and small across many industries. He endeavors to inform buyers in a no-nonsense manner and spares no vendor that comes under his microscope.

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  • &quot;Quantum value of delivering data in context&quot;

    Hi Dennis, I was wondering if you could tell us something that can be done with Tibco that cannot be done with an RDBMS?

    Surely "delivering data in context" is exactly what an RDBMS already does?
  • The future is away from packaged software

    Whether it is on-premise or "in the cloud" it is still software built for someone else's business, not for yours. The on-premise versus cloud discussion is a red herring.

    The future is simpler and more effective development tools that put customer businesses back in the driving seat.
    • RE: SAP and Oracle: the knives are out

      @jorwell - right...and when we've got them then maybe things will change?
      • However, who is going to do this?

        @dahowlett <br><br>I don't want to sound like a conspiracy theorist but I suspect that a covert strategy of companies such as SAP and Oracle (at least the applications arm) and the big consultancies is to make everything seem more complicated than it really is. This way you can lock the customer into a situation of dependency. In addition with license fees under pressure the money there is more money to be made in selling bodies than selling software - so there is no incentive to improve productivity. <br><br>Who will break ranks and develop the tools that enable the business customer?
  • RE: SAP and Oracle: the knives are out

    Sorry...but Safra and Larry make CRAZY STATEMENTS....and have for years. Your Attacking SAP blogger's thoughts comes across as sour grapes...clearly, customers are purchasing software from both...and Fusion isn't even a standalone product....must coexist with legacy at TWICE the TCO....are you getting a check from Larry?
    • RE: SAP and Oracle: the knives are out

      @aidensteel@... sour grapes? The day I get a check from Larry & Co you can be sure I will post it on this blog...
  • the real stakes behind the circus acts

    When there is fighting between such companies as Oracle and SAP, the arguments rarely include the real strategic stakes. I think the real problem is how Oracle and SAP will support real-time cloud-based apps. In other words how they will support real-time in-memory databases. A quick look at this video from Hasso Platner (SAP) may shed some light on where SAP is aiming:<br><a href="" target="_blank" rel="nofollow"><a href="" target="_blank" rel="nofollow"></a></a><br>I think the unexpected noSQL pledge from oracle today at OOW is the response. <a href="" target="_blank" rel="nofollow"><a href="" target="_blank" rel="nofollow"></a></a>
    • RDBMSs are real time

      @exorbyte <br><br><br>RDBMSs are by their very nature real time, but plenty of people (including those who should know better) abuse them by treating them as if they are a file system.<br><br>I was shocked when I first saw Oracle Apps updating the general ledger by a batch process from the subsidiary ledgers. I think the Apps division of Oracle may be some kind of industrial museum.<br><br>From the start of my career I've always worked with real-time stuff - maybe things have gone backwards from the modern 1980s world of mini-computers?<br><br>If you use an RDBMS properly then everything is real time. Oracle are obviously fully equiped to deal with this. <br><br>I don't understand the relevance of the in-memory discussion. As a designer, developer or user of an RDBMS the physical storage layer should be completely invisible to me. An RDBMS is a purely logical layer and can therefore represent the data physically on disk, in memory or any other medium for that matter.<br><br>Whether the physical layer is on disk or in memory is not important, provided of course that the database is recoverable to the last check point in the event of a crash.
  • RE: SAP and Oracle: the knives are out

    Here we go...I have been saying here for a while now that Oracle is becoming a marginal player in the enterprise IT business. The statements from Safra are the first indications of panic. It is an executive who for the first time let's something slip that was not meant for public consumption. However, those of us following enterprise IT business know that it is the first indication that Oracle executives know what we have known all along and that is that Oracle is in trouble. All lines of business Oracle has except for RDBMS are in trouble. Customers are slowly figuring out that running Oracle RDBMS standard edition with a cluster of say 8 cpu by 8 core servers allows for RAC implementation without paying ridiculous fees for Enterprise Edition and therefore allows top tier performance with very small budget. 8 by 8 box allows just outstanding performance for 95% of enterprise applications running Oracle. The other 5 % represent data warehousing that is really going away from Oracle into GreenPlum, Netezza and SAP. Many customers have already woken up to Teradata scam of heavy maintenance and prof. services approach. It is interesting to see how a company that was build from scratch into billions in revenue is slowly going down in its capabilities and all in the lifetime of the founder.
    • RE: SAP and Oracle: the knives are out

      @mikies ...all empires fail and especially those in software.
    • I don't see it


      Oracle continues to post very good revenue and profits.

      Some of the recent strategies like Fusion Middleware have proved misguided, but Oracle have enough cash to absorb these experiments.
  • &quot;Quantum value of delivering data in context&quot;

    Hi Dennis, maybe you can tell me one thing that you can do with Tibco that cannot be done in an RDBMS?
  • &quot;Quantum value of delivering data in context&quot;

    Hi Dennis, maybe you can tell me something that can be done in Tibco, but not in an RDBMS?
  • &quot;Quantum value of delivering data in context&quot;

    Hi Dennis, I was wondering if you could give me an example of something that can be done in Tibco that cannot be done in an RDBMS?
  • RE: SAP and Oracle: the knives are out

    Extremely balanced view Dennis, both companies are actually trying to be like Apple. They think that, that model will fit theirs as well. Unfortunately DB is not the place you innovate, but streamline, perform at lower cost. Its the applications and new business model that you need to adapt upon. Imagine we all starting commenting about microprocessors, do those now really make any biz differentiator
  • RE: SAP and Oracle: the knives are out

    Having worked for both firms I can say that they both in some form or another have bad mouthed their competition to customers. The other factor to consider is that the market has in some ways shrunk and there is less to fight over so the fighting get uglier. I agree totally that the maint revenue is dying, in '09 I had clients asking to not only be let out of maint contracts but also refunds on license fees for s/w not implemented. It's a fast changing landscape and they had both better be moving a lot faster and soon.