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SAP Disses Oracle in Latest Round: SAP 1, Oracle 0

It's no secret to anyone who has attended an Oracle or SAP event: the two consider each other to be neck-and-neck competitors for leadership in the ERP space.

Hasso Plattner, CEO of SAP, and Larry Ellison, chairman of Oracle, frequently take swipes at each other in their pronouncements. So it's no surprise that SAP (www.sap.com) recently took a major public-relations jab at Oracle Corp. (www.oracle.com), jettisoning Oracle as an internal development and production platform, while announcing strengthened partnerships with Microsoft Corp. (www.microsoft.com) and IBM Corp. (www.ibm.com).

However, the impact of this posturing is virtually nil for SAP R/3 customers, says Robert Dorin, VP of research with Aberdeen Group (www.aberdeen.com). "Given the market share that Oracle has of all SAP installations as the database of choice, I think only a very revolutionary shift in user demand will have a very substantive impact on the market," he notes. "I'm not sure what the real implication of the announcement is, other than SAP trying to take a slap at Oracle."

Recently, SAP announced that it plans to replace Oracle with SQL Server 7.0 as the primary database on its internal Windows development and production systems, and IBM's DB2 as the primary database for its IBM, Sun and Linux platforms. SAP also announced that its 200 internal training and customer demonstration and presentation systems will be migrated to SQL Server. SAP and Microsoft also announced an initiative to promote Windows 2000 as an operating system for mySAP.com, SAP's electronic marketplace initiative.

SQL Server has already been popular as a database for SAP Windows NT implementations. At the end of third-quarter 1999, more than 50 percent of new SAP U.S. installations on Windows NT have been on SQL Server, with about 2,000 Windows NT and SQL Server-based installations worldwide.

SAP also announced it is teaming up with IBM to promote IBM's DB2 Universal Database to underpin SAP solutions. In turn, IBM will market SAP as a solution for its various platforms, including Windows NT/2000 on Netfinity servers, RS/6000s, AS/400s, S/390s, Sun Solaris, and Linux. MySAP.com offerings such as the Workplace server, SAP Business-to-Business Procurement, SAP Customer Relationship Management, SAP Strategic Enterprise Management and SAP Knowledge Management were scheduled to be generally available on all DB2 platforms in December.

This follows on the heels of a declaration by IBM that it would be forging close partnerships with leading application software vendors in each horizontal market. IBM has been uncoupling itself from the applications software business, opting to partner and offer best-of-breed solutions from ISVs in various disciplines. "The developers and ISVs will be our primary way to propose application software," says Bob Timpson, general manager, solution developer marketing with IBM.

Aberdeen's Dorin doesn't foresee a great surge in demand for SAP on DB2 as a result of the agreement. "This strikes me as a Hasso-Larry episode," he observes. "The bottom line is SAP users are going to continue to use Oracle databases. I'm not going to even touch the rat's nest of what it would mean to suddenly have DB2 become a dominant player in the SAP market. There's too much invested from an infrastructure and perspective at user sites in Oracle and SQL Server. To say that DB2 is going to eat into the Oracle presence in the SAP market is silly. This is just a posturing issue."

That posturing stems from Oracle's growing presence in the ERP space. SAP's market share stands at approximately 35 percent, with Oracle second at 17 percent, according to GartnerGroup's Dataquest (www.dataquest.com).

Lately, with the emphasis on putting ERP functionality on the Web, Oracle "has been gaining ground significantly," Dorin relates. "Oracle had Internet-related initiatives before SAP announced mySAP.com. They're head-on competitors in terms of trying to get into the extended enterprise application area."--Joseph McKendrick

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.