SAP doesn’t really need to do anything as a result of the Oracle-Sunmerger. In fact, things would probably go a lot smoother for thecompany if it stayed the course.
You have to shake your head at the wave of speculation followingMonday’s takeover announcement, particularly the notion that justbecause Oracle bought Sun, its biggest rival could enter a megadeal ofits own. Whatever Larry Ellison’s motivations for the Sun purchase –ownership of Java, a desire to dabble in the hardware business, payingback an old favour to Scott McNealy – they certainly couldn’t have beenthe same as IBM’s. Apart from its acquisition of Cognos, Big Blue isnot an applications company, and there is no reason, as some havealready suggested, that IBM would merge with SAP justbecause Sun got away. Sun would have given IBM some interestingsoftware and gotten rid of some competition in the server space, butSAP would bring on one major integration headache, which it doesn’tneed amid this recession.
SAP would have even less to gain. As Oracle increasingly putstogether one of the most complete “stacks” in the IT industry, thereare advantages to be had from continuing the grand tradition ofMicrosoft and making yourself hardware-agnostic. While the Globe usedthe cringe-inducing “one stop shop” cliché to describe Oracle, SAP canposition itself as a provider of choices, which many customers stillprefer to make. (This includes, as SAP consultant Peter Russo sointelligently points out, choices between Java and ABAP).
Oracle has been trying to catch up with SAP for a long time in theapplications space, and at this point it can match its rival prettywell. SAP, however, has not merely a longer track record and (somemight argue) credibility with users, but stability in the midst of whatwill have to be a complex, gradual melding of the Oracle and Sunorganizations. 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 avaluable opportunity both to reassure its installed base and to appealto customers who might be put off by Oracle’s moves. I don’t see a lotof Oracle or Sun customers migrating necessarily, but the fight to keepits existing customers is SAP’s to lose. That’s where it needs to focusits energy.
SAP is still seen as not only hugely expensive but hugelyaggravating to deploy and maintain. Any investments it makes now shouldbe to tackle that, proving that it’s easier to run SAP than walkthrough the portfolio of options that Oracle and Sun will be pitchingto customers. SAP could also do more to help customers understand themanagement implications of using its software in virtualizedenvironments, and better explain its stance on cloud computing and itssoftware-as-a-service roadmap.
Every year or so Oracle proves that you never know what the companyis going to do next, and who it’s going to buy to do it. SAP, on theother hand, looks more and more predictable. In economies like thepresent one, predictable is highly attractive.