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In a global economy that’s more-demanding and faster-paced than ever, many businesses are facing an enormous strategic decision: should they recommit to their primary enterprise-software supplier, or should they switch to a competitor offering not only different products but a different strategy, a different philosophy, and a different value?

It’s a momentous decision, because enterprise software is no longer confined to back-office and process-driven applications but instead has become the means by which companies in every industry engage with customers, monitor and adapt to marketplace changes, push knowledge out to sales teams and customers, and optimize operations.

The decision takes on additional gravity because of the stories we’ve all heard about the complexity, expense, and upheaval that can accompany a switch from one enterprise software vendor to another. Are such headaches inevitable, or are some software vendors able to offer you ongoing innovation without disruption?

For most of the businesses evaluating whether a switch is in order, the core question comes down to this: of the two leading enterprise-applications suppliers, which is the better choice to help me take my business where it needs to go—SAP or Oracle?

That big central question—which is the better choice?—encompasses a range of strategic issues about more than just automating core business processes and keeping the trains running on time. While those requirements remain vital, they’ve become table stakes and will not be the determining factor.

Rather, many customers will be basing their choice on which company does the best job at addressing the business requirements of today’s dynamic global economy, in which speed, flexibility, mobility, predictability, industry knowledge, customer engagement, and freedom of choice are indispensable.

On top of those tangible issues, businesses also have to consider other qualities that are less tangible but no less vital: does the alternative I’m considering inspire trust? Have they done this before—and done it successfully? If I’m going to essentially bet my business on this new software partner, can I trust that they’ll quickly switch over to being a business partner who understands my business, my customers, my challenges, and my opportunities? Will they share my intensity for minimizing uncertainty and risk, and for maximizing clarity and transparency every step of the way?

And given those drivers, I think that customers will use some or all of the following questions to determine whether SAP or Oracle is the better choice:

1) Which company will give me faster time to value?

2) Which company will give me better TCO?

3) Which company will help me move into the cloud as aggressively as I want?

4) Which company has the mobile expertise to help me not only make my sales force more productive, but also allow my customers be more successful by letting them engage with consumers in the ways those consumers prefer?

5) Which company has committed to a long-term technology roadmap and maintenance policy that gives me predictability and transparency so I can confidently plan my own strategies for the next several years?

6) Which company’s approach to the market will give me maximum openness, choice, and innovation?

7) Which company offers the deepest industry-specific knowledge, including benchmarks relevant to my industry and my region and my competitive set?

A striking example of the new growth-oriented corporate mindset regarding IT is offered in this excerpt from a recent Wall Street Journal blog post, CIOs Face Tough Year With Demand Up, Budget Down, about a Gartner study of CIO priorities :

Overall, CIOs rank growth as their top priority, despite tough economic conditions and future uncertainties. They are particularly attentive to attracting and retaining customers and to creating products and services, according to the 2012 Gartner CIO Agenda report.

“Technology is very much back on the agenda despite the economic situation,” said Dave Aron, vice president and Gartner Fellow. . . .

“In earlier years, technology had gone off the agenda and it was just about running a tight ship. But with all the drivers in social, and mobile in particular, a lot of companies see technology as a way to drive growth,” Mr. Aron said. . . .

“In the past, everyone promised that BI would save the world, and it didn’t. Now there is more mature BI and much more data. There is a big opportunity in analytics and BI to help a company pick up weak signals about market quicker, to specialize more on what is generating value,” he said. . . .

“In the last few years, CIOs have been in thrall to business process but there is a recognition that in these fast-changing times business process is not such a useful lens. It often gives quite incremental improvement, just tuning the way things are done,” Mr. Aron said. (End of excerpt.)

Those comments from Gartner’s Aron underscore the fundamental reality that the business-technology strategies that helped businesses succeed in the past will not be enough to help them continue to grow and succeed into the future. (A great book detailing this upheaval is Marshall Goldsmith’s “What Got You Here Won’t Get You There”.)

New opportunities in exploiting analytics, cloud computing, mobility, Big Data, and customer engagement are forcing corporate buyers of technology to reassess assumptions—and choices—that have worked for them in the past.

SAP’s contention is that Oracle customers are at a critical decision point as Oracle begins to roll out its new Fusion Applications, and that the arrival of those brand-new apps presents Oracle customers with three alternatives from which to choose (and in the interest of full disclosure, I’m an SAP employee):

1) Stick with their current generation of Oracle applications. This approach offers ongoing stability because the massive upgrade and rip-and-replace changes are avoided, but it also means those customers will be stuck with a lame-duck platform for which Oracle has already announced higher annual support costs (in some cases) and in which Oracle will have little incentive to invest. As InformationWeek’s Doug Henschen recently wrote about Oracle, “The coexistence strategy surely appeals to customers that want to avoid the chaos of rip-and-replace software deployments. But it also presents the dilemma of when to choose stability and when to opt for Fusion features including services-based delivery, role-based interfaces and embedded business intelligence.”

2) Adhere yourself to Fusion. This approach boasts better performance with the untested new apps, but it also forces customers making this choice to serve as canaries in the brand-new Fusion Applications coalmine as they go where no customers have ever gone before. Oracle promises that customers can move at their own pace and that all the new stuff will work very smoothly with the old stuff, but analyst Josh Greenbaum, in an article called The Customer Comes Second….Oracle’s Engineered for Investors Software Stack, argues that customers going down this path will be required to bear a huge integration burden.

3) Switch to other vendors, including SAP. For those of you who are considering a switch, you’re not limited to alternative solutions from your same supplier. For example, the enterprise market is loaded with relatively small cloud-based suppliers offering point solutions. As for SAP as an alternative, you’re got complete flexibility: you don’t have to replace everything with SAP—just the pieces you want to replace. And SAP works fine with Oracle. Also, in two of the key categories highlighted by Gartner’s Aron in the Wall Street Journal excerpt above—analytics and mobile—SAP is the undisputed market leader worldwide.

One of the top financial analysts covering enterprise software recently said “Fusion may be confusion” for enterprise customers, and suggested that was the primary reason behind Oracle’s recent widely-reported miss of its revenue numbers for Q4. Rick Sherlund of Nomura Securities offered this analysis :

It still puzzles us, how could Oracle go from showing 16% new software license growth in the August quarter to 2.5% in the November quarter versus Street estimates of 11%; and what are the implications for all the enterprise software and hardware companies about to report December quarter results? It just did not make sense to us, so we checked in with a number of our industry contacts over the Holiday period for their perspective.

Fusion may be confusion for the market: Contacts tell us that Fusion may be freezing Oracle out of the final stages of some apps deals as customers resist buying the old product but are not convinced the new Fusion suite is ready for prime time. The Applications Unlimited program intended to help in the transition may no longer be effective now that Fusion is shipping. Now that Oracle has missed the quarter, the field complaints begin to surface. (End of excerpt.)

In contrast to such problems of Oracle’s own making, SAP feels its overall strategy and new-product pipeline offer customers a better choice when it comes to innovative new technologies such as the HANA in-memory database and platform; mobile solutions for security, management, and applications;  Rapid Deployment Solutions that begin delivering value in several weeks; and cloud computing, where SAP’s pending acquisition of SuccessFactors will give SAP more than 15 million paid seats in the enterprise cloud.

In addition, SAP has committed to a clear and predictable roadmap for its core applications through 2020, providing customers with clarity and certainty as they devise their own strategies into the future.

Here’s another industry-expert perspective on SAP and Oracle, this one from InformationWeek’s Doug Henschen’s Jan. 17 article headlined SAP Leads, Oracle Lags In Enterprise Apps:

SAP on Friday released preliminary numbers for its fourth quarter ended Dec. 31, 2011, that showed software revenue increased 16% over the year-earlier period (17% in constant currencies) to 1.74 billion Euros ($2.2 billion). Software and software-related services revenue were up 12% over Q4 2010 to 3.72 billion euros ($4.7 billion), handily beating analyst’s estimates of 3.6 billion Euros.

By contrast, Oracle’s software sales for its fiscal second quarter ended Nov. 30 were up just 2% compared with the year-earlier quarter, whereas analysts expected at least a 7% increase.

The contrast is even sharper if you separate software revenues by type. Oracle’s new-license revenues for databases and middleware were up 4% while applications revenue–primarily ERP and CRM–actually declined by 2%. Oracle blamed the overall shortfall on purchase delays tied to new internal approval requirements at customer firms . . . .

Oracle and SAP are both selling the same idea: Keep the legacy core of software we’ve sold you, and buy our innovative new software that goes with it. SAP calls it “innovation on top of a stable core.” The core is the single application code base of Business Suite 7, which SAP has committed to support with maintenance through 2020. In the latest quarter at least, it appears SAP’s brand of innovation is winning. (Emphasis added.)

For all of you confronting these strategically crucial decisions, SAP says it offers a better choice. It might be worth a look—after all, you’ve always got alternatives.

(Follow me on Twitter at bobevansSAP.)  

RECOMMENDED READING:

The Top 10 Reasons SAP HANA Is Disrupting Larry Ellison’s Grand Plans

SAP HANA and the Game-Changing Power of Speed 

Top 10 Reasons for SAP Acquisition from SuccessFactors CEO Lars Dalgaard 

Larry Ellison and Marc Benioff Just Can’t Agree: What Is the Cloud? 

Memo to Salesforce.com CEO Marc Benioff: You Stand on Software’s Shoulders  

SAP Seeds the Cloud with Blockbuster SuccessFactors Deal

Can SAP and SuccessFactors Crack the DNA Code? 

SAP and SuccessFactors: 1 Billion Potential Users

Cloud Computing’s Greatest Danger—and Richest Opportunity  

SAP in China: Hasso Plattner and the HANA Revolution 

SAP HANA and the Death of the Lunch Break 

Inside SuccessFactors: Chris Lochhead on the House Lars Dalgaard Built

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    1. Former Member Post author
      Hi Jim—thanks for your opinion. Many businesses are indeed facing this choice, and different software vendors offer very different solutions—so, customers need to be sure they’re asking the right questions.
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      1. Ethan Jewett
        Jim’s judgment was short, but I wouldn’t say it is an opinion. This definitely qualifies as spreading FUD. Take this, for example:

        “Adhere yourself to Fusion. This approach boasts better performance with the untested new apps, but it also forces customers making this choice to serve as canaries in the brand-new Fusion Applications coalmine as they go where no customers have ever gone before.”

        Here, let me change that:

        “Adhere yourself to Hana. This approach boasts better performance with the untested new database/app-server/platform, but it also forces customers making this choice to serve as canaries in the brand-new Hana coalmine as they go where no customers have ever gone before.”

        It seems just as true either way, and just as unfair. This article is well-written and carefully crafted to sound like neutral advice, but it’s not.

        In my opinion, these kinds of articles on SCN and similar efforts on Forbes AdVoice do SAP a disservice.

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        1. Former Member Post author
          Hi Ethan–thanks for your comment. The issues covered in this piece are of enormous consequence to businesses today. We at SAP have a perspective on those issues, just as the folks at Oracle have their own perspectives as well. The objective here was to pose some questions and offer some answers/opinions, and also to do so in a forum where the superb SCN community will have free reign to respond vigorously–we place huge value on those perspectives.
          I like what you did in flipping Fusion and HANA in that one paragraph–perhaps the difference, though, is that SAP has been and continues to be extremely open about what our customers are doing with HANA, what our plans are for HANA, and how HANA will work with every element within the SAP portfolio.
          Thanks again, and please continue to share your criticisms and other comments with us.
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          1. Marilyn Pratt
            I’m glad then that Bob responds to the critique, in a way that engenders more comments and conversation here.  I’ll voice a personal opinion though that I’ve found in the past that the SCN approach (and perhaps the SAP approach)of resisting the normal urge to engage in “bashing” a competitor and their products has always been a source of pride to me as an SAP employee and member of this SCN community.  While I’m not sure this piece qualifies for the kind of competitor-bashing I’ve seen in many other environments, I wouldn’t have been eager to open this format on SCN, as I imagine boomarang effects from such type of writing.  Perhaps that is what Greg alludes to when he says one might not agree entirely with the form of the blog.  And yes, while this is “our” platform, I guess as an SAP employee, I’d prefer to see our customers and partners making side-by-side comparisons of products rather than hearing that from other employees. (personal bias).  But I am very pleased to see the way Bob responds (and he is a relative newbie to this SCN environment).  Good that he welcomes further comments.  He may surely receive them as this is not a shy crowd as he now knows.
            As a small observation about Jim’s comment. I admit shamefacedly that I needed to look up the term FUD (thanks to Jim and Ethan for introducting me to it now but I would have loved an explanation of the acronym upfront…although the comments terseness made it imperative to look it up). Lastly I agree with Bob that it is instructive to do what Ethan has elegantly and brilliantly done and “flip” the products in the paragraph in question to inform us of how it would resonate to have the proverbially shoe on the other foot.
            So I guess rather than speak about technical merits of a choice of product suites, this blog post from a community perspective has become a place to discuss netiquette.  Therefore, as an “official” community advocate, I’d say that at the very least the conversation is civil and demonstrates the caring and passion that is our trademark here.  Nothing wrong with that. Carry on.
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          2. Marilyn Pratt
            Bob, glad to see you respond with such an open invitation to continue the discourse.  It seems the blog comments are more focused around concerns the community has on the blog tone or “form” (as Greg called it), rather than discussing the validity of its assertions (which might have come as a surprise to you, its author.)
            As a sidebar, I shamefacedly admit that I needed to Google the term FUD to understand the acronym that Jim and Ethan used but their critique was clear enough.
            It’s been my experience and observation (and a source of personal pride as an employee) that the SCN contributors and SAP my employer generally avoid “competitor bashing”.  I think perhaps the sensitivity here on SCN might also be around the preference to hear customers and partners make side-by-side comparisons of products and products suites rather than see those posted by SAP employees.
            Yes, it is an SAP platform and website, and no there is no problem creating visibility to our products and offerings here, but as you see, contents viewed as “overt” marketing are viewed contentiously.  

            To Bob’s credit as a relative “newbie” to our community posting netiquette (although obviously a veteran and a respected one in other environments) it is pleasing to see his welcoming responses to a community that is obviously not shy about expressing itself.

            Let the conversation carry on, civily, intelligently.  We all can learn from this.

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            1. Former Member
              I think we’re cobbling together two different discussions and it might be worth examining them separately, even if they are tightly linked:

              1.)SAP has historically taken the “high road” with regards to competitors like Oracle that relish in taking a good swipe at our culture/strategy/products. A more brazen tone in addressing these accusations could carry negative consequences.

              2.)Forbes AdVoice content is harming SAP’s image because it is smoke-and-mirrors marketing fluff (FUD?).

              Regarding #1 – I think it’s ok to throw a few jabs back at competitors from time to time. We’ve been silent for far too long.  A monumental shift in how companies buy and use software is currently taking place. Now’s not the time to be complacent or let false and inaccurate stories spread about SAP. There’s too much at stake. That said, it is a learning process and I am sure we’ll be adjusting the volume of our desire to be more vocal accordingly.

              Regarding #2 – As the lead content editor/curator for SAP’s Forbes AdVoice program, it has never been my intention, or the intention of SAP AdVoice contributors to get on the bad side of this incredibly awesome community. Quite the contrary.  Even though I work for SAP, like Bob Evans and a few others, I have a journalism background and take great pride (and have a lot of fun) writing for SAP and mentoring others.  It’s totally ok by me if some don’t like the SAP Forbes AdVoice content. But please let people make up their own minds. I understand that by the very nature of SAP paying to blog doesn’t sit well with some of you but please, read and comment on the content. Don’t pre-judge based on a few Oracle-related posts or get hung up on the platform it’s delivered on.

              If you made it this far, thanks for reading!

              Fondly and FUD free,

              Tim

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          3. Ethan Jewett
            Hi Bob,

            Thanks for the thoughtful responses. I’d like to echo what others here are saying: regardless of what I think of the article, your engagement in comments is great.

            Here’s the thing – I don’t much like Oracle. Why not? Mostly because Oracle executives seem to run off at the mouth an awful lot and seem to be focused expansion and pricing power via acquisition. Technically, Oracle is fine most of the time, but from a cultural standpoint I have a hard time with the company.

            SAP is different. SAP gets the job done, creating value for customers. SAP doesn’t talk a big game, but it does create lasting innovations and it is rewarded for those innovations. Well, perhaps I should say that SAP didn’t talk a big game. These days, it seems this has started to change, and I’m personally pretty disappointed in that.

            I urge you to pay attention to the feedback you and others are getting here on SCN, but even more-so to the feedback we see on Twitter and in blogs from non-SAP folks every time one of the Forbes AdVoice hit-pieces goes up. Listening to this feedback is important. It is there, but only if you go and look for it. There is a certain amount of rah-rah linking from SAP executives, but the reactions I see from people I respect who are able to speak their own minds are pretty negative. These are reactions from some of the analysts, consultants, and trusted customer employees that have a lot of influence on how SAP is seen in the customer-base.

            For me the question is this: Does SAP want to be seen as a company that is focused on a war of words with Oracle or as a company that is seriously focused on getting the job done and creating value for customers? I think the two are fairly exclusive, both as far as image and in terms of real focus.

            Cheers,
            Ethan

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            1. Former Member Post author
              Good morning, Ethan (do I sense a “Mission Impossible” vibe from that greeting?) — thanks again for your candid and valuable feedback, which I take very much to heart. Per your question in your final paragraph: I assure you that neither I nor anyone else at SAP wants “to be seen as a company that is focused on a war of words with Oracle”; rather, we are all focused on the alternative goal you mention in the second part of your question: being “a company that is seriously focused on getting the job done and creating value for customers.”

              If every business-technology decision-maker on the planet were a member of SCN, and if every one of them understood the core qualities of the major IT vendors as well as you and the analysts and consultants and other SCN members do, then our job would be far simpler. But because that’s not the case, we use Forbes and other communications and marketing channels to reach those segments who don’t know nearly as much about SAP.

              We believe that for the business market SAP currently serves and wants to serve in the future, the issues right now are incredibly important. And because the solutions and strategies offered by SAP and other top IT vendors are *dramatically* different–and because we at SAP feel ours have the best chance of (your words) “creating value for customers” that is real and enduring, we’re using a variety of means to tell the world about what we’re doing and why it’s different.

              Thanks again for the advice–I’m listening quite intently to what you and others are saying.

              Cheers,
              Bob

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              1. Ethan Jewett
                Hi Bob,

                I blame Tom Cruise for the fact that my name went from being extremely rare to becoming one of the top boys names in the US. I used to be so unique! ๐Ÿ˜‰

                I read this response with regards to the Forbes blog and I was confused. So I went and took a look at the blog. I have to admit, I had no idea how much content SAP is putting up on that blog and how much of it is either innocuous or is interesting information about SAP. So, when I painted all the AdVoice pieces with one brush as “hit pieces”, that wasn’t fair. Sorry about that. It does look like a good effort to reach people who are not that familiar with SAP.

                However, it’s worth noting that this is not the context in which I read this article. Before today, I had only seen 4 or 5 Forbes AdVoice pieces, and two of them were these:

                “Oracle’s Exalytics: ‘Old Wine in New Wineskins'” – http://www.forbes.com/sites/sap/2011/10/05/oracles-exalytics-old-wine-in-new-wineskins/

                “Oracle President Safra Catz Suffers SAP Hallucinations” – http://www.forbes.com/sites/sap/2011/10/03/oracle-president-safra-catz-suffers-sap-hallucinations-2/

                These are the type of posts that get forwarded through Twitter and blogs, often with accompanying notes of chagrin regarding SAP losing its way. These types of posts plant the seed of doubt that make me think sometimes that SAP is coming “to be seen as a company that is focused on a war of words with Oracle”. It is also these types of posts that set the context for my negative reading of this article.

                Here’s one recent example on Twitter from Michael Koch – a respected independent SAP consultant and SAP Mentor: “if tweet.contains(“SAP” && “Forbes”) { desire.toRead = desire.toRead / 100 };” (Translation: SAP pieces on Forbes that I have seen referred to through Twitter make me sad.) – https://twitter.com/pixelbase/status/162901779732897792

                Every time there is a new slightly controversial piece on AdVoice, I see tweets like this. Funny how much damage a couple of blogs can do among an important influencer group. This article has some similar traits to the other two articles linked above, and I think rightly triggered the FUD alarm, or perhaps the “people who live in glass houses…” alarm. I think SAP would do well to resist the temptation to try to respond to Oracle’s bully tactics and instead take the high road. It is certainly possible to get your point across regarding competitor’s products without resorting to talk of canaries in coal mines, hallucinations, or pharmaceuticals.

                Cheers,
                Ethan

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  1. Steve Rumsby
    I’m with Jim and Ethan on this. This blog reads to me as marketing, pure and simple. Well dressed marketing, sure, but marketing nonetheless.

    I’ve seen criticism of blogs like this by partners touting their wares here. SCN is not the place for marketing. SAP shouldn’t engage in it either.

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  2. Gregory Misiorek
    i don’t get people complaining about SAP touting its own wares on its own website. so, if this is marketing then what? how else would the business move forward? maybe, you may disagree with the form, but who owns the platform here?
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  3. Former Member
    I want to thank Bob for starting this discussion. As blogs are often best-used as a platform for advocating an opinion, making your side of an argument (especially on a controversial topic, since commenting can spark healthy debate), showing the perspective from your own point of view, this is a great one.  That’s what Bob’s blog does and is, so it’s excellent from where I sit. 

    I also like the comments that focus on the strength of Bob’s argument or hypothesis – but not whether he should be allowed to argue this point, or whether it’s OK to do it here in SCN.  This is *exactly* the right place to get that kind of intelligent discourse going with true experts with a range of strong opinions.

    Thank you Bob and commenters.  I’d like to hear more.  Is there a 4th choice to add to Bob’s 3 options for Oracle customers?  Who has gone through such an evaluation (as a customer, or as a partner advising a customer), and what were the decision criteria and findings? 

    Great stuff, all.

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    1. Former Member Post author
      Hey Mark–thanks for your perspectives. This is my first engagement with the SCN community and while I’ll be sharing some of my own opinions and ideas, I also realize SCN offers a huge opportunity for me to learn, to listen, and to connect. So I’m grateful for all of the feedback that members have taken the time to post, and I take it very much to heart.

      I worked in the publishing/media side of the tech busines for many years and the biggest thing I learned is that the most-valuable element of a magazine or a website is its audience and its readers–its community. What I tried to offer in this first post, and what I will continue to do (and I thank Mark for his encouragement), is pose questions and ideas that reflect the concerns and challenges confronting businesses and organizations in today’s fast-paced world.

      Thanks for the counsel, and I look forward to learning more and sharing more in future exchanges.

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