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Is Oracle Sapping SAP?

October 7, 2007 by CRM Help Desk

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I got training in SAP Enterprise Resource Planning (ERP) system years ago when it was on a mainframe platform – version R/2. At that time the Germans who came to the US to teach, emphasized that the name was “S, A, P”. They were aware of the negative connotations of the word sap in the United States.

The Players
The letters S, A, P stand for some German words. At this point, knowing what those letters mean, is as irrelevant as knowing what IBM stands for. (By the way, I just learned that SAP was started by former IBMers). SAP was founded in Germany in 1972. It had become greatly successful and respected in the European market before it made any serious inroads in North America.

Oracle Corporation, a US company, leads the way in the home grown variety of enterprise-wide software. At its start in 1977, the focus was on database solutions. It took close to 20 years before a reasonable facsimile of an ERP system was produced.

Both companies started with ERP systems which handled basic business functions such as order entry, accounts receivable, production, inventory, purchasing and accounts payable – all integrated with a financial backbone. Now their offerings have expanded to include ERP off-springs like Customer Relationship Management (CRM), Business Intelligence, and Supply Chain Management (SCM) to name a few.

The Definitions
At dictionary.com, I looked up definitions for sap. The two definitions I would have given:
1) to undermine;weaken or destroy insidiously – with Synonyms: impair, enfeeble, deplete, exhaust, enervate
2) Slang. a fool; dupe.

But two other definitions surprised me:
1) Fortification. a deep, narrow trench constructed so as to form an approach to a besieged place or an enemy’s position
2) Fortification.
a. to approach (a besieged place or an enemy position) by means of deep, narrow trenches protected by gabions or parapets.
b. to dig such trenches in (ground).

Which sap is SAP?

The Challenges:
* SAP corporation is still the leader in the ERP space, but Oracle is gaining ground.
* Turnover in SAP’s top ranks is worth noting and watching
* SAP is sticking to old ways of doing things – ways that have been successful in the past.
* They have evolved from mainframe R/2 to client server SAP R/3 and then to enterprise version mySAP. Now, SAP is giving more attention to “software as a service” to try to capture more of the midsize market. Are they committed to operating in that space?

The Approach
Oracle is building approach / attack trenches by acquiring companies that make Oracle a more comprehensive solution provider. Is SAP impaired by this? An April 2007 InformationWeek article talks about SAP’s CEO Kagermann and his strategies for the future. SAP did not capture the lead position by being a fool. They cannot and should not be discounted. SAP is still a force to be reckoned with.

Author Description

Noble & Associates Consulting specializes in IT Strategy, Needs Assessments, Software Selection, ERP Implementations, and curing Post Implementation Distress™. See www.NobleAdvantage.com .
Copyright 2006, Noble & Associates Consulting, Inc.

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Written by CRM Help Desk · Filed Under CRM Systems, Enterprise Resource Planning 

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