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Global CIO: Larry Ellison's Nightmare: 10 Ways SAP Can Beat Oracle

Ellison bluntly predicted Oracle will blow past SAP in enterprise apps, but here are 10 steps SAP should take to reassert its preeminence.
ACQUISITIONS

6) Autonomy. In line with the point above about predictive analytics, Autonomy has developed a set of applications as well as management and analytical tools that help customers anticipate consumer behavior, extract meaning from what others consider to be noise, and ultimately move in lockstep with the markets they serve rather than always having to play catchup. Oracle and SAP are both in large part masters of transaction systems—the acquisition of Autonomy, combined with some of the steps above, could begin to push SAP into the more dynamic world of customer interactions rather than merely transactions.

7) Teradata and Netezza. SAP, including new co-CEO Bill McDermott, has been critical of Oracle's move into the systems business because, SAP has said, the ultimate intent is to stifle customer choice. While I don't agree with that argument, I think SAP should be more than willing to entertain evolving with the times—and particularly with customer interests and requirements—by evaluating these acquisitions to get into the specialty-systems business. This would give SAP the opportunity to pursue the integrated/optimized systems approach that IBM created and currently leads, and that Ellison has said Oracle will aggressively pursue. If McDermott believes "the stack" should stay heterogeneous, then the acquisitions of Teradata and Netezza would give SAP that latitude while also allowing the company to extend some of its unique software capabilities into complete systems that today's data-intensive processes require. Both Teradata and Netezza play at the high end and would be ideal matches for many of SAP's customers.

PARTNERSHIPS

8) IBM. SAP and IBM have a long and close relationship, and in light of Oracle's decision to compete directly against IBM in not only databases and middleware but also high-end hardware, both SAP and IBM could have much to gain by extending and deepening their long-standing alliance. Could SAP and IBM collaborate on leveraging the massive "business value" database that chief value officer Bhoudary described above? Can IBM and SAP find a way to leverage IBM's expertise in predictive analytics with SAP's transaction-driven applications? Can SAP and IBM develop a line of integrated and optimized systems that exploit high-growth niches requiring these finely tuned and specialized machines? Can SAP and IBM's business-services and technology-services teams leverage that incredible business-value database to deliver greater business performance to customers and greater revenue and profit to IBM and SAP?

9) Microsoft. The companies have made some moves together but since Microsoft hates Oracle almost as much as SAP does, it would appear these two have only scratched the surface. Microsoft wants to be a serious cloud player—it's all in for the cloud, as Steve Ballmer has said—and SAP's cloud strategies are just beginning to unfold. Why not a Microsoft-SAP cloud alliance? And perhaps that could even be expanded into a three-player team with Hewlett-Packard: after all, HP and Microsoft have already pledged to invest $250 million over the next few years to jointly explore and create cloud solutions, and it seems like SAP could add a lot to that mix. While the companies are currently tight partners for Oracle software, HP certainly has no love for Oracle's new hardware line.

10) Wipro and Infosys. Both of these multibillion-dollar IT services companies are pushing aggressively into business services as well, and those moves parallel SAP's need to extend beyond transaction-driven applications and solutions and into foresight, business value, and greater connection with end customers. Both Wipro and Infosys have great relationships with SAP but now is the ideal time for SAP to raise not only that ante but also the betting in a way that lets Wipro and Infosys bundle their burgeoning expertise in business services and vertical markets with the vast knowledge and insights that SAP's applications generate every second of every day in industries around the globe.

Larry Ellison says SAP "has lost its way." While it's true that the company has certainly stumbled a bit and has some very serious challenges ahead of it--as no less an authority than co-founder and chairman Hasso Plattner has said--it's probably a bit of a stretch for Oracle's CEO to say that SAP "has lost its way."

And even if it is true, Ellison might very well regret reminding SAP that it needs to find its way home.

RECOMMENDED READING:

Global CIO: Oracle CEO Larry Ellison Declares War On IBM And SAP

Global CIO: In Oracle Vs. SAP, IBM Could Tip Balance

Global CIO: Oracle's Dazzling Profit Machine Threatened By Rimini Suit

Global CIO: 10 Things SAP's Co-CEOs Should Focus On

Global CIO: An Open Letter To SAP Chairman Hasso Plattner

Global CIO: BP's Extraordinary Transformation Led By CIO Dana Deasy

Global CIO: How 22% Annual Fees For You Equal 51% Margins For Oracle

Global CIO: Oracle-Sun A Bad Deal? Only A Fool Would Say That

Global CIO: Where Do Oracle's Profits Come From?

Global CIO: Oracle CEO Larry Ellison's Goodbye Letter To European Customers

Global CIO: Why SAP Won't Match Oracle's 22% Maintenance Fees

Global CIO: An Open Letter To SAP CEO Leo Apotheker

Global CIO: Have Oracle And SAP Hit Tipping Point With 22% Fees?

GlobalCIO Bob Evans is senior VP and director of InformationWeek's Global CIO unit.

To find out more about Bob Evans, please visit his page.

For more Global CIO perspectives, check out Global CIO,
or write to Bob at [email protected].