SAP and Oracle Go Another Round

SAP threw another blow at the body of rival software vendor Oracle,
announcing that is offering technical support and a conversion roadmap for
customers running Siebel software.

On the eve of its Sapphire user conference beginning tomorrow in Orlando,
Fla., SAP said that it was offering succor to Oracle customers confused and
uncertain about the future. TomorrowNow, a subsidiary of SAP based in
Raleigh, North Carolina, will provide Siebel customers with a low-cost
alternative to their current service contracts. TomorrowNow will also
provide Siebel customers with SAP’s Safe
Passage
program, which is used to help enterprises migrate from
Oracle-owned systems to SAP.

Oracle and SAP have been throwing haymakers at one another for almost 18
months, or since Oracle announced its acquisition of PeopleSoft in December 2004.

Oracle then landed a rabbit punch when it announced the acquisition of Siebel
Software
in September of last year.

But Oracle has confused customers about whether, and for how long, it will
continue supporting solutions from the various software companies it has
acquired in recent months, including Siebel, PeopleSoft and Retek.
And it has yet to deliver on Fusion, which represents its promise to
customers to integrate the offerings of those various companies.

SAP has taken advantage of this uncertainty by offering customers of those
companies Safe Passage as a migration path to SAP.

“There are a large number of customers of the company formerly known as
Siebel with question marks in their minds,” Bill Wohl, a spokesman for SAP,
told internetnews.com.

This fight is coming at a critical time for many enterprise customers, as
the advent of Service Oriented Architecture (SOA)&nbsp and other
composite applications is forcing them to make significant technology
investment decisions.

“There is an imperative for customers to make big strategic decisions,”
noted Joshua Greenbaum, principal analyst for Enterprise Applications
Consulting.

“They want to have a single infrastructure, not three or four of them,” he
told internetnews.com.

Greenbaum also believes that customers have reason to be concerned about
their fates.

Oracle’s “initial statements of their intentions when they announced the
PeopleSoft acquisition set a negative tone,” he said. “They’ve retracted
them since, but the memory lingers in the background.”

Oracle, however, claims that it is being misrepresented.

“We don’t feel that’s a justifiable criticism,” said Karen Tillman, senior
communications director for applications at Oracle.

Tillman told internetnews.com that Oracle has been consistent in its commitment to support all products acquired through at least 2013.

“There was a lot of FUD [fear, uncertainty, doubt] put out by our
competitor, but Oracle has been as clear as can be that we will continue to support those products,” she said.

Tillman was equally dismissive of the Safe Passage program.

“A small audience is interested in that kind of third party support. We
don’t see it as a big concern to our business overall,” she said.

Oracle also responded to SAP’s announcement with a release of its own,
touting recent quarterly sales figures it says proves that momentum is on
its side, and boasting that SAP customers are defecting to its products.

According to the release, Oracle revenues from sales of new licenses grew by 31 percent over the most recent quarter, compared with 14 percent for SAP.

The release also said that Oracle had won 500 customers directly at the
expense of SAP, and that its OFF SAP (Oracle Fusion for SAP) program has been gaining traction, with 2,000 customers expressing interest in the program.

“The point is they are saying we have no momentum, but we are actually
growing our business and taking market share,” Tillman said.

FUD or not, Greenbaum said SAP’s approach allows it to develop relationships with customers who are unsure of whether or not to stick with Oracle in a post-Siebel world. Even if customers don’t choose Safe Passage, the third-party support offered by TomorrowNow allows customers to reduce maintenance expenses while they consider their options.

“It’s a customer-savvy strategy,” he said. “Because customers want different kinds of options.”

But, said Greenbaum, this is not the end of the fight.

“I have no doubt that this back and forth is going to go on for a number of years,” he said.

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