4) Business analytics innovation and growth. McDermott was quite blunt on this competitive front: "Similarly, in business analytics, we saw continued double-digit growth is this segment, and strong growth in demand throughout all the regions. SAP's business analytics business in Q3 is twice the size of Oracle's equivalent business, and we are growing at least 50% faster than them, taking share from Oracle Hyperion in every geography, with 38 replacements year to date. Enterprise information management and Enterprise performance management are clearly leading the way."
3) Sybase and the promise of enterprise mobility. Both executives touched on this repeatedly throughout the call, with McDermott citing the huge potential of the real-time and "unwired" enterprise in his opening remarks. While significant in its own right for SAP, the Sybase acquisition is also important because Oracle has no counterpoint for mobile products and strategy, making this a clear differentiator for SAP.
Two thoughts on that: first, Hagemann Snabe said that SAP's Business ByDemand SaaS platform now has a couple of mobile apps on Apple iTunes marketplace. While that's not world-shaking, it does indicate how far SAP has come in its willingness to embrace the realities of the marketplace instead of, as it used to do, adhering rigidly to and never straying from its traditions.
Second and more important, he offered a sweeping view of how and why mobility is so essential to not just SAP's strategy but also to that of its customers: "Moving on to on-device, the Sybase acquisition puts SAP into an immediate leadership position in mobility. This acquisition is about innovation and growth for SAP and Sybase, and delivering exceptional value for customers.
"We are continuing to build the pipeline for the Sybase unwired platform for SAP mobile CRM, mobile workflow for SAP Business Suite, and custom applications, and we gained 24 new Sybase Unwired Platform partners this year. By the time of Sapphire next year, we will be well on our way to delivering a single enterprise mobile platform, and creating a software development kit that, in combination with our platform, will enable SAP, our customers, and our partners the powerful combination of business applications and a leading mobile platform to build new, exciting, mobile applications, like the new CRM on the BlackBerry and the iPhone that we have already delivered to the market. Yesterday, the co-CEO and founder of RIM demonstrated live SAP running on the new BlackBerry Playbook," he said.
"In closing, SAP is the only business-application company that delivers a consistent portfolio of business applications and next-generation business intelligence on any device and in any deployment option."
2) On-premise, on-demand, and on-device: the three pillars. While Hagemann Snabe offered a detailed overview of each of those approaches, McDermott captured SAP's overall three-pillar strategy in his opening comments: "We remain the market leader in the enterprise software industry—our customer-focused strategy to provide solutions to customers on-premise, on-demand, and on-device is finding broad market acceptance.
"We are pleased to say that Gartner shares our view of the future in their recent release of 'The Top 10 Technologies For 2011,' with cloud, mobile, and next-generation analytics taking the first three spots. Our three-pillar strategy and our Sybase acquisition, and our continued innovation and growth in business analytics is motivating customers, employees, and partners all over the world."
Before McDermott and Hagemman Snabe were named co-CEOs early this year, SAP had no such coherent and sweeping strategy. Can it fulfill that vision? It looks like it's well on its way to doing so. Will Oracle have an answer or an alternative? At least for right now, it doesn't appear to—or, at least it hasn't framed its position in such straightforward and customer-centric terms.
1) Open versus lock-in; ecosystem versus The Stack. I'm not sure that customers are still buying into these traditional notions as vigorously as SAP is presenting them, but I do get the impression that this is the primary point on which SAP wants to distinguish itself from Oracle. It comes up—quickly and frequently—in every conversation with SAP executives, and it certainly was there in strength during last week's earnings call.
McDermott said customers "want to partner with a company that has an open ecosystem, one that does not lock customers into a stack, but gives them choice," and he leaned hard on current events to articulate SAP's value proposition with this comment: "As the industry is transforming, our partnerships are getting even stronger because we recognize the importance of the deep relationships we have with our partners to deliver value and business outcome for our partners. And unlike others, we work closely with our partners—we do not alienate them."
That reference is clearly aimed at an element of this week's Oracle-SAP trial in which Larry Ellison has made it unmistakably clear that he intends to compel former SAP CEO and newly named HP CEO Leo Apotheker to answer what will surely be some aggressive questions from Oracle attorneys.
That mission of Ellison's has been quite public and quite personal, but it also calls into serious question the viability of the long-standing partnership and alliance between Oracle and HP: can those two companies continue to collaborate at the deepest levels when their CEOs are locked in such a bitter and public battle?
But back on the primary point: are CIOs today willing to give Oracle's new philosophy a try—that expensive and unproductive IT complexity can be eliminated by going with an all-Oracle stack—or do CIOs continue to believe, as SAP does, that a broad and heterogeneous stack, in spite of its inherent problems, is the right way to go? Here's how Hagemann Snabe framed it:
"You basically see two trends: there are some companies who are consolidating, and they want to own the whole stack, and that's their strategy. And then you have innovators, who say I'll stay focused on my part but then I run faster and innovate faster. And we believe that's a superior strategy—and for that to work, you need strong partnerships so you still get the end-to-end stack to the customer," he said.
"We think that combined stack of focused companies with innovation as their strategic imperative is a better combination for the customer, and it gives them choice—and, that's what we hear from the customers as well." RECOMMENDED READING:
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