The wild card in this war is customers, who may not react to innovation or stack-appeal as expected. In fact, the rampant vendor consolidation of recent years has raised concerns about the vendors still standing.
In our just-released InformationWeek Analytics Enterprise Apps 2011 report, nearly two-thirds (64%) of 274 IT pros responsible for enterprise apps cited the "ability to integrate with existing systems and infrastructure" as the most important quality they look for from enterprise applications vendors. The next most cited quality, responsive service and support, came in at 38%.
Customers are mightily concerned about interoperability. They're also worried about counting too much on any single vendor. "We see more and more SAP customers becoming less SAP-centric," Wang says, "and we also see Oracle customers trying to create a buffer against the single stack."
The fear, Wang and others observe, is that overreliance on any single vendor will diminish a customer's ability to influence pricing. And that's the sort of fear that promises of innovation or IT cost savings might not overcome.
In our research 39% of respondents agreed with the statement "core ERP system(s) are crucial, but we have a heterogeneous environment that requires application-independent information infrastructure." That was the top response, but not far behind (with 31%) was the view that "our enterprise is committed to a core ERP system as the platform for running the business. We want to build and extend initiatives around this platform."
Even when companies commit to one ERP suite, chances are they have eggs in lots of other baskets. It's estimated that more than 60% of SAP customers, for example, run their apps on Oracle database. I don't see that changing quickly, and SAP hasn't bothered trying to aggressively push the newly SAP-certified Sybase ASE database on those customers as an alternative to Oracle database.
In fact, despite their market battles and legal feuds, SAP and Oracle have managed to agree on support for each of their hottest new products. That is, Oracle has cleared the way for SAP customers to integrate SAP Hana with Oracle databases running SAP apps. And SAP has recently certified Oracle Exadata to run SAP apps. That happened because customers demanding interoperability.
What's your take on this battle for your IT budget? Are you willing to go all in with a single vendor? Share your thoughts below.
ERP is old news, but enhancing legacy software with mobile, analytics, and social apps can deliver substantial new value. Also in the new, all-digital issue of InformationWeek: SaaS can create new data silos unless companies follow best practices to make those apps work with on-premises systems and data sources. Download the issue now. (Free registration required.)