Suchit Singhal New Business Chat

Oracle V/S SAP

Oracle Corporation and the German SAP AG have had a decade-long history of cooperation. This cooperation began in 1988, with the integration of SAP's R/3 enterprise application suite with Oracle's relational database products.

Their products were considered to be complementary to one another, rather than substitutes. Despite the current SAP partnership with Microsoft, and the increasing integration of SAP applications with Microsoft products (such as SQL Server, a competitor to Oracle Database), Oracle and SAP continue their cooperation, and according to Oracle, the majority of SAP's customers uses Oracle databases.

In recent years, however, competition between Oracle and SAP has increased, and as a result, the rivalry between the two companies has grown, even developing into a feud between the co-founders of the two companies, where one party would frequently voice strong negative comments about the other company. In 2004 Oracle began to increase its interest in the business of enterprise applications (in 1989, Oracle had already released Oracle Financials). A series of acquisitions began, the most notable being the acquisition of PeopleSoft and Siebel (and most currently, Hyperion).

SAP recognized that Oracle was becoming a competitor in a market where SAP had the leadership, and saw an opportunity to lure in customers from those companies that had been acquired by Oracle. It would offer those customers special discounts on the licenses for its enterprise applications (Safe Passage Program).
Oracle would resort to a similar strategy, by advising SAP customers to get "OFF SAP" (a play on the words of the acronym for its middleware platform "Oracle Fusion for SAP"), and by also providing special discounts on licenses and services to SAP customers who chose Oracle.

Currently, Oracle and SAP are also competing in the third-party enterprise software maintenance and support market (the latter through its recently acquired subsidiary TomorrowNow). On March 22, Oracle filed a suit against SAP.
The complaint alleged that TomorrowNow, which provides discount support for legacy Oracle product lines, used the accounts of former Oracle customers to systematically download patches and support documents from Oracle's website and appropriating them for SAP's use.

Some ERP market analysts suggest the suit could be part of a strategy by Oracle to decrease competition by SAP in the third-party enterprise software maintenance and support market.

Posted by Suchit on Feb 12, 2009 5:48 AM