The Big Picture: Oracle-PeopleSoft Battle's Side Effect
It's hard to argue with SAP's strategy when tech pros crave depth.
For some time now, the running joke in the business-application market has been, "Who's winning the Oracle-PeopleSoft hostile takeover bid?" And the answer: SAP. The drama continued to play out as PeopleSoft's board rejected Oracle's offer even though 61% of PeopleSoft's shareholders tendered their shares for $24 per share. Meanwhile, SAP has been able to keep its focus and seek out opportunities to attract new customers.
That doesn't mean SAP has a perfect strategy or perfect solutions, but it's hard to argue with its go-to-market strategy at a time when business-technology professionals are craving for a level of breadth and depth and products with specific industry expertise. Serving more than 27 unique industries, SAP was one of the first enterprise software vendors that built offerings mapped to the customer's business rather than a one-size-fits-all model.
And now it seems that SAP is upping the ante once again, going after the market that every IT vendor is trying to understand and capture, small and midsize businesses. U.S. small and midsize businesses' spending on business software will grow 14.3%, compared with large companies' 4.9% increase, according to a study released earlier this year by market researchers Access Markets International Partners. With these numbers, it's easy to see why SAP recently unveiled an extension of its four-year partnership with Hewlett-Packard to provide an offering that combines hardware, software, and services, packaged for businesses that have less than $1 billion in annual revenue.
Of course, this won't be the first or last time that a conventional enterprise IT vendor will attempt to sail successfully within the waters of small and midsize businesses. However, it always seems that large-scale IT vendors often get the packaging right but never deliver on the actual service, support, or appropriate sales structure to identify and serve this sector.
Maybe that's why Microsoft and SAP were at one time talking about the possibility of merging. (Of all places, this little tidbit was made public during the recent Oracle-PeopleSoft hearings.) I'd bet that Microsoft was drooling over SAP's enterprise expertise, while SAP was drooling over the established customer base of smaller businesses that Microsoft holds.
Ah, but that was in the past and the hammer called reality continues to knock on PeopleSoft's and Oracle's heads. For as long as these two companies continue to pound each other, business-technology professionals are going to look for a partner that can help them move their business forward. And maybe this is one of the reasons that SAP's products and financial viability continue to grow.
I'm not sure how this story is going to play out, but one thing is certain--as partners look to share information across their entire value chain, they'll seek out IT vendors that can help them integrate based on specific industry processes. Seems as though SAP is listening to its customers.
I'd love to know what you think. Is SAP winning at the expense of PeopleSoft and Oracle? Does SAP have the right formula for the small and midsize business market? Please give me your feedback, and you'll get an opportunity for complimentary registration for the upcoming InformationWeek Spring Conference at the Ritz-Carlton in Amelia Island, Fla., April 10 to 13. (More details at informationweek.com/events/05spring).
Michael Friedenberg, VP and Publisher (email@example.com) Bob Evans will return next week.
To discuss this column with other readers, please visit the Talk Shop.
[Interop ITX 2017] State Of DevOps ReportThe DevOps movement brings application development and infrastructure operations together to increase efficiency and deploy applications more quickly. But embracing DevOps means making significant cultural, organizational, and technological changes. This research report will examine how and why IT organizations are adopting DevOps methodologies, the effects on their staff and processes, and the tools they are utilizing for the best results.
2017 State of IT ReportIn today's technology-driven world, "innovation" has become a basic expectation. IT leaders are tasked with making technical magic, improving customer experience, and boosting the bottom line -- yet often without any increase to the IT budget. How are organizations striking the balance between new initiatives and cost control? Download our report to learn about the biggest challenges and how savvy IT executives are overcoming them.