Who’s the top innovator: SAP or Oracle? A customer’s query from SAP’s Sapphire User Conference

Coming down from the dais after a panel discussion on mobility, I was approached by an attendee with the following story. He was on the IT staff at a Fortune 500 company that was a wall-to-wall Oracle shop, and his boss, the CIO, had sent him to Sapphire with the following mission: make sure that the company’s planned upgrade of its Oracle system made sense. In other words, should the company consider switching over to SAP as opposed to sticking with a massive upgrade of its Oracle software?

With that as the premise, here was his question to me  — which he half-jokingly gave me five minutes to answer: of the two companies, which is the more innovative, Oracle or SAP?

To be fair, the comparison is profoundly unfair for the following reason: Sapphire 2011 represents the easily the fifth public event I have been to that was hosted by SAP in the last year for the purpose of giving industry analysts an in-depth view of SAP’s innovation vision. That doesn’t include the dozen or so briefings I have had from SAP on different aspects of their products and strategy. Funny how all that input comes in handy when a customer wants to know the difference between a couple of competitors.

Contrast that with Oracle, which, since last fall’s Open World, has had exactly zero analyst-level events to discuss their enterprise software strategy. As for briefings – I was able to get a short update on Oracle Fusion recently, after no small amount of prodding, but there’s been really no attempt to keep me or my fellow analysts systematically up to date with the latest and greatest thinking at Oracle on what was once seemed to be a strategic focus of the company: enterprise software.

So, with that in mind, it was relatively easy to tell this customer the SAP innovation story, and much harder to discuss the Oracle story. Here were my six major points about where SAP is innovating:

1)      Hana in-memory database. SAP CTO Vishal Sikka’s Sapphire keynote on Wed. had almost an overabundance of customer testimonials on the value of Hana. I talked to a major consumer products customer who told me that with Hana he will be able to do sales analysis at the vending machine level for his products in real time, something that will make a huge difference to his company. This product is real, it’s amazing, it changes analytics for any company with a lot of data and the need to understand those data’s value in real time.  It’s not just a piece of technology: There’s a whole raft of Hana-based applications coming soon and in following years. And Hana is in a pre-beta test for a cloud deployment later this year as well. The term game-changing is one I try to use as sparsely as possible, but when it comes to Hana it seems uniquely appropriate. The buzz around Hana at Sapphire among customers was louder than any new product introduction in recent memory.

2)      Mobile. The Sybase acquisition has brought the Sybase Unwired Platform and its associated technology and applications (including a set of iPAD ready mobile CRM apps that are quite slick looking) under the SAP umbrella. Marrying the billions of mobile endpoints that can be serviced by SUP with the SAP’s Business Suite has the potential to change not just the cellphone/tablet world, but the relationship of every mobile and sensor-based device to the back-office. While the acquisition was an Oracle-like move and hardly indicative of organic innovation, SAP’s plans to marry SUP and mobility to Hana and the SAP Business will provide a platform for some truly never-before-seen innovation. That marriage will be highly innovative, and SAP gets major points from me for making the whole significantly greater than the sum of the parts. (More on this in a subsequent blog post.)

3)      On-demand applications: SAP is in the market today with its Business ByDesign SME suite, and a pending ByDesign SDK that will allow partners and customers to build unique on-demand applications that use ByDesign’s full business functionality as a set of building blocks. While this is the vision of Force.com and the reality of Microsoft’s xRM SDK for Dynamics CRM, ByDesign’s palette of building blocks is significantly broader, and can function as a platform for innovation that is, until Microsoft’s own AX ERP suite becomes similarly enabled, provides SAP with some hard-to-beat innovation mojo. SAP is also rolling out Sales On-demand:while late to market, it’s a legitimate fast-follower for the SAP customer base. SAP also has a collaborative on-demand tool, Streamwork, that is quite innovative as well. Then there’s Carbon Impact, Sourcing On-demand, and on-demand apps for travel management, talent management, and service management will be hitting the market later this year. While SAP hardly created the on-demand market for enterprise software, it’s following fast with a steady stream of on-demand applications for specific vertical industry requirements.

4)      Application deployment and upgrades: SAP’s enhancement packs, which effectively upgrade the Business Suite without actually forcing the customer to go through an upgrade, have been around for a few years and are an example of SAP’s innovation in the customer-critical application lifecycle arena. The company has followed up on the EPs with its Rapid Deployment Solutions, which, as the name implies, deliver fixed-price industry-specific functionality wrapped in best-practices that are intended to get the customer up and running quickly and cheaply.  SAP has RDS for CRM, SCM, IT management, finance, and sustainability, which more on the way. These approaches to the application lifecycle are truly innovative at a time with total cost of ownership has never been more critical to customers.

5)      Enterprise Performance Management and analytics. SAP is also pre-packaging its analytics solutions in order to make them more consumable at a lower TCO. I attended an early morning session at Sapphire with a group of customers that highlighted how valuable they think the EPM strategy is. Again, some of these products, like planning and consolidation, are the result of an acquisition (OutlookSoft, in this case) but many of the newer ones, like disclosure management, and spend performance management, are homegrown. Hats to SAP for raising the bar on delivering analytics value while minimizing the need for consulting services.

6)      The Sapphire User Conference: Then there’s the Sapphire conference itself. SAP has made a virtue out of designing a show floor and conference layout that is so impressive it deserves a special mention. The way SAP positioned conference keynotes, booth space, communications, and customer spaces was really unique, and made  for a conference unlike any other in the industry. This is the second year SAP has used this layout, and the company recently won an event industry award for last year’s show. The user experience of Sapphire represents an enormous contrast to the admittedly much larger Oracle OpenWorld, which is crowded, crammed, and exceptionally user-hostile by contrast.

I stopped at those 6: There were others, but the customer had only given me five minutes to pontificate.

What did I tell the customer about Oracle? Well, there’s the company’s new stack strategy, which is sort of innovative from the sales side (it has great revenue potential for Oracle), but I don’t believe that most companies will truly benefit from buying the entire stack from a single vendor. Then there’s Fusion Applications, which are coming out later this year. Fusion has a great user experience, and some nice functionality. But while that user experience looked good the first time I saw it more than two years ago, the time it has taken to move towards GA has taken a lot of the luster off Fusion. There is also lots of innovation in the individual components of Fusion, like Distributed Order Orchestration and Compensation Management, and the overall deployment model (on-demand, on-premise, hosted) is an innovative approach in and of itself.

That’s where I sort of run out of steam in discussing Oracle’s innovation strategy. If I dust off my eight month old notes from Open World, I don’t see a whole lot more. While it’s hard to believe that Oracle hasn’t moved the innovation needle since then, if they have they’ve told no one about it. What is clear is that the departure of Charles Phillips and the acquisition of Sun has shifted priorities at Oracle, and one of the casualties seems to be innovation in enterprise software.

The moral of the story is twofold: SAP has been doing a ton of innovation, and while it may be hard keep track of all the pieces, even for SAP, the company has gone out of its way to build an influencer program that is top notch for the simple reason that it provides an on-going infusion of updates and knowledge about what the company is up to that helps everyone – analysts, and through our myriad interactions, customers – know what’s happening.

Oracle, by contrast, may have been innovating its enterprise software strategy over the last eight months, but if it has, the company has chosen not to communicate about it. The result of Oracle’s poor dialogue with the market may be deliberate – if you have nothing nice to say, then perhaps it’s best to say nothing at all – but, knowing the people on the applications side of the house relatively well, I remain convinced there’s a there there.

But if you ask me, I couldn’t tell you. Even when if I wanted to.

6 Responses

  1. […] Posts Who’s the top innovator: SAP or Oracle? A customer’s query from SAP’s Sapphire User ConferenceSAP’s In-memory Hana Database Appliance Gets AppedAbout Josh GreenbaumThe Return of Business […]

  2. […] The Synergy BeginsBy Josh Greenbaum on June 2, 2011 Following a grueling three days at SAP’s Sapphire user conference, a few lucky analysts got to travel to New York and spend a day and a half with an even luckier set […]

  3. The key point here is that real innovation, beyond incremental improvements, seems to be coming via acquisitions for both Oracle and SAP. In your examples, 1 and 2 come from Sybase, 5 from BusinessObjects. SAP is clearly a late adopter for on-demand, so item 3 is a change, but not innovation. SAP is not an innovator in upgrade deployment compared with other vendors – item 4 is really addressing a product deficiency.

    Perhaps SAP is a marketing innovator where Sapphire is an example. But, in this era of connectivity and concern for the environment, physical event innovation seems akin to telegraph innovation. And, I don’t think customers at Sapphire get to reconfigure the SAP product roadmap.

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  5. […] strategy that is at the core of the Oracle way. SAP’s challenge is to prove that the advantages of its software innovation strategy provide a better long-term value than Oracle’s dual software rollup and Exa-twins […]

  6. […] strategy that is at the core of the Oracle way. SAP’s challenge is to prove that the advantages of its software innovation strategy provide a better long-term value than Oracle’s dual software rollup and Exa-twins […]

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