Feeds

Don't go away, IBM and SAP – Larry's not finished with you yet

What Oracle CEO's obsession with Amazon means to the old rivalry

Build a business case: developing custom apps

Division 2 promotion

Oracle, IBM and SAP are in Division 2. These are companies that make a lot more money than those in division one, multiple billions per quarter and tens of billions each year, but this comes from operations that the cloud threatens.

The question is this: which of the firms from division two can break into and lead division one?

On this, there is no clear leader and race resembles the jostling just as the horses in a race leave the gate.

SAP claims fast growth from its cloud-related business, but has pushed back its overall revenue goals by two years while also muddying the number it has given. It has stated a $3bn to $3.5bn target but this is a number that is tainted by the fact it leaves in all the costs associated with getting there.

IBM, we found out this month, is making more from selling other people its hardware and software to build clouds than it does from its own cloud services. It will now spend $1.2bn to build 40 data centres to make more online services available, so it is moving sideways in this race.

Oracle is treading water. New software licences and cloud software subscriptions in Oracle’s latest quarter were flat year on year at $2.3bn.

The figure alone means Oracle is in the SAP ballpark on cloud-related income but when it comes to growth SAP is the winner – it claimed a 66 per cent jump in cloud subscriptions and support to €209m ($285m) during its latest quarter (year on year) while software and cloud subscriptions were up two per cent to €2.10bn ($2.87bn).

The pressure to break clear from this pack is intense.

All three companies are of a similar size and force, well financed with billions of dollars to their names and armies of staff and partners.

Each knows the other two has got it in them to beat it, a fact that makes it incumbent on each party to try to beat the other two.

IBM and Oracle have been rivals in software and hardware, but IBM is losing weight on the hardware by dumping x86 servers on Lenovo while bulking up on its data centre footprint to host more cloud services.

SAP has fought Oracle on owning the beating heart of organisations through their ERP. But after 30-odd years and with both companies enjoying huge market share, the bad news is they now need to start all over again.

A Gartner report this week claimed the kind of highly customisable, all-in-one ERP systems that made Oracle and SAP rich will no longer be bought by customers in two years' time. New business spend will be going on best of breed in the cloud.

Andy Kyte, vice president and Gartner fellow has written:

The concept of a single ERP suite that meets all of an organisation's needs is dead, and has been replaced by a hybrid ERP approach that combines cloud point solutions with a smaller "core" of on-premises ERP function, such as financials and manufacturing. Gartner predicts that hybrid ERP environments will be the norm within five years.

Which means SAP and Oracle will lock horns once more, this time offering cloud-based ERP and integrating existing ERP with the cloud. Only this time, they will be up against more smaller, more nimble and fast growing apps rivals, like Workday – offering the HR portion of the ERP puzzle.

So, bend over IBM and SAP - and prepare once more for the sound of snapping bath towels in the locker room of enterprise tech. ®

HP ProLiant Gen8: Integrated lifecycle automation

More from The Register

next story
Secure microkernel that uses maths to be 'bug free' goes open source
Hacker-repelling, drone-protecting code will soon be yours to tweak as you see fit
NO MORE ALL CAPS and other pleasures of Visual Studio 14
Unpicking a packed preview that breaks down ASP.NET
KDE releases ice-cream coloured Plasma 5 just in time for summer
Melty but refreshing - popular rival to Mint's Cinnamon's still a work in progress
Leaked Windows Phone 8.1 Update specs tease details of Nokia's next mobes
New screen sizes, dual SIMs, voice over LTE, and more
Put down that Oracle database patch: It could cost $23,000 per CPU
On-by-default INMEMORY tech a boon for developers ... as long as they can afford it
Another day, another Firefox: Version 31 is upon us ALREADY
Web devs, Mozilla really wants you to like this one
Google shows off new Chrome OS look
Athena springs full-grown from Chromium project's head
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.