SAP doesn’t really need to do anything as a result of the Oracle-Sun
merger. In fact, things would probably go a lot smoother for the
company if it stayed the course.
You have to shake your head at the wave of speculation following
Monday’s takeover announcement, particularly the notion that just
because Oracle bought Sun, its biggest rival could enter a megadeal of
its own. Whatever Larry Ellison’s motivations for the Sun purchase –
ownership of Java, a desire to dabble in the hardware business, paying
back an old favour to Scott McNealy – they certainly couldn’t have been
the same as IBM’s. Apart from its acquisition of Cognos, Big Blue is
not an applications company, and there is no reason, as some have
already suggested, that IBM would merge with SAP just
because Sun got away. Sun would have given IBM some interesting
software and gotten rid of some competition in the server space, but
SAP would bring on one major integration headache, which it doesn’t
need amid this recession.
SAP would have even less to gain. As Oracle increasingly puts
together one of the most complete “stacks” in the IT industry, there
are advantages to be had from continuing the grand tradition of
Microsoft and making yourself hardware-agnostic. While the Globe used
the cringe-inducing “one stop shop” cliché to describe Oracle, SAP can
position itself as a provider of choices, which many customers still
prefer to make. (This includes, as SAP consultant Peter Russo so
intelligently points out, choices between Java and ABAP).
Oracle has been trying to catch up with SAP for a long time in the
applications space, and at this point it can match its rival pretty
well. SAP, however, has not merely a longer track record and (some
might argue) credibility with users, but stability in the midst of what
will have to be a complex, gradual melding of the Oracle and Sun
organizations. That’s not to say SAP shouldn’t think about a better partnership with IBM, but that’s not the same as a merger.
With its annual Sapphire conference fast approaching, SAP has a
valuable opportunity both to reassure its installed base and to appeal
to customers who might be put off by Oracle’s moves. I don’t see a lot
of Oracle or Sun customers migrating necessarily, but the fight to keep
its existing customers is SAP’s to lose. That’s where it needs to focus
its energy.
SAP is still seen as not only hugely expensive but hugely
aggravating to deploy and maintain. Any investments it makes now should
be to tackle that, proving that it’s easier to run SAP than walk
through the portfolio of options that Oracle and Sun will be pitching
to customers. SAP could also do more to help customers understand the
management implications of using its software in virtualized
environments, and better explain its stance on cloud computing and its
software-as-a-service roadmap.
Every year or so Oracle proves that you never know what the company
is going to do next, and who it’s going to buy to do it. SAP, on the
other hand, looks more and more predictable. In economies like the
present one, predictable is highly attractive.
