Between the words of SAP CEO Henning Kagermann and Oracle CEO Larry Ellison, one could have a difficult time parsing through the hyperbole. Clearly, Oracle's acquistion of PeopleSoft (and stepchild J.D. Edwards) has resulted in the sort of sofware behemoth whose sites SAP cannot escape, right? Kagermann apparently sees it that way. Said Kagermann of Oracle's chances of success at ousting SAP from its market-leading position by launching products that merge Oracle's own software with PeopleSoft's in two to three years, "It would be the first time so few people with so few resources and so little time had achieved so much... I can only say: Good luck."
Meanwhile, Ellison, for a change of speed, came across as being rather reserved in his overall assessment of the pending battle between the two software titans. "We bought PeopleSoft to cement our position in several areas. We are now the No. 1 applications provider in North America," said Ellison during an analysts' conference. "Applications companies have different strengths in different industries and geographies. We would never dream of competing against SAP in the energy or automobile industries...we're not going to bang our heads competing with them in Germany."
Perhap one of the subtexts to this barb trading is more telling though. Will the company with the healthiest warchest prevail? While, SAP expects its pro-forma operating profit margin to increase by only zero to 0.5 percentage points this year, Oracle expects to post earnings of 62 cents per share for fiscal 2005, representing an increase of 24 percent over fiscal 2004. For fiscal 2006, Oracle said it is targeting earnings per share of 76 cents to 80 cents (beating the Street's estimates of 70 cents per share), which would represent growth of 22 percent to 28 percent.