Oracle vs. SAP: Round two

We recently asked two prominent experts to argue their respective cases for SAP vs. Oracle. These follow-up columns are their official rebuttals to each other's arguments.

 What does the future hold for the ERP market? SAP and Oracle are currently slugging it out for dominance in the years ahead, and we asked two prominent experts in their respective fields to make the case for SAP vs. Oracle. The first article, Face-off: SAP vs. Oracle, was posted simultaneously on SearchSAP.com and SearchOracle.com. Tons of users submitted comments, anecdotes and insights into the issue; some of them are featured in...

this news story, SAP vs. Oracle: Users speak out.

However, we also wanted to give each expert a chance to comment on the other party's column. Here's the second round of Face-off: SAP vs. Oracle. As before, we invite you to send in your comments. Did the authors miss something? Do you have something to add? If you're a former SAP customer who decided to go all-Oracle, we want to know why, and vice-versa.

One random contributor from SearchSAP.com and one random contributor from SearchOracle.com will receive a $100 Amazon.com gift certificate!

 

The case for SAP


By Joshua Greenbaum

The case for Oracle


By Faun deHenry
Greenbaum's rebuttal

It's hard to rebut an article that failed to address the main issues, at least as they pertain to the column I wrote. Ms. deHenry has given an impassioned argument for the historical relevance of Oracle's eBusiness Suite 11i, and I would be remiss to refute many of those claims. eBusiness Suite performs well, installs relatively easily, and has good middleware and analytics built into the product. The thousands of users who have embraced this existing piece of software know this to be true, as do I.

But this face-off, so I was told, was to be about the future – about Fusion vs. NetWeaver – an issue that Ms. deHenry did not deign to address directly or indirectly. No matter, there is plenty of fodder for a rebuttal of her comments, despite the fact that they missed the real issue by a country mile.

Ms. deHenry's characterizations of SAP's software tend to focus on some historical misperceptions that do her arguments a great disservice. To blithely claim that SAP has had a history of poor implementations, and is therefore more problematic to implement than Oracle, tells a rather biased story. Nobody in this business should cast stones in this regard, as both vendors have been plagued in the past by implementation problems, and have the scars to show for it. What's more important is that these implementation problems, be they on the Oracle or SAP side, turn out almost always to be fault of the implementer. Bad software doesn't kill implementations, bad managers do.

Nor is it necessarily fair to claim that Oracle can be implemented more quickly than SAP – such generalizations reveal an ignorance of the complexities of ERP software implementation and a lack of understanding of the average size of individual implementations in each vendors' customer base. Despite what companies like Nucleus and others have been able to report, there is simply no acceptable way to compare even highly similar implementation times between vendors – the number of factors involved are too great to make any such comparison reliable. More on this in a moment.

More importantly, though, is the fact that the average size of an SAP implementation is significantly larger than that of an average Oracle implementation. SAP customers are often experiencing more complex implementations simply because they are doing more complex things than their Oracle counterparts. Again, comparing some mythical average implementation time when the disparities between the customer bases is so large renders such claims against SAP moot.

All this leads to Ms. deHenry's final argument regarding lower total cost of ownership (TCO). Again, with all due respect to my friends at Nucleus, comparative TCO studies are an epistemological impossibility. To accomplish such a Herculean task one would have to take two largely identical companies in identical industries, each having similar, and extremely well-documented "before" ERP systems on which to set a baseline for costs. The subsequent implementations would have to be undertaken by similarly staffed teams with equivalent levels of expertise, and, of course, involve the implementation of largely identical functions. Then a comprehensive audit of the "after" results of the implementation would need to be compared to the "before" baselines. Only then would anyone be able to claim that they understood the relative TCO of each of these systems.

Unfortunately for Ms. deHenry, no one, and certainly not Nucleus, has ever undertaken such a rigorous TCO bake-off, for the obvious reasons that the candidate implementations simply do not exist. It would be nice for all us to have such data, but, reality dictates that we stick to known facts, not wishful thinking.

In the end, both SAP and Oracle have emerged from the rigors of the last 10 years with well-established products and customers, and congratulations are due to both for moving the bar forward from a collectively troubled past. But, I would still contend that, for companies wishing to move forward for the next 10 years, SAP's roadmap for NetWeaver, and its ability to drive industry-specific verticalization into its enterprise services architecture (ESA), are a better bet than Oracle's still half-baked plans for its Fusion Applications. Until Oracle – and advocates like Ms. deHenry – can articulate a better reason for picking Fusion, I'm going to recommend giving Fusion a pass. Too much is at stake to do otherwise.

 


Joshua Greenbaum, Market Research Analyst & Consultant, Enterprise Applications Consulting
Joshua has more than 15 years of experience in the industry as a computer programmer, systems analyst, author, and consultant. Prior to starting his own firm, Enterprise Applications Consulting, he was the founding director of the Packaged Software Strategies Service for Hurwitz Group, which focused on technology, infrastructure and business issues in the enterprise applications market.

 

deHenry's rebuttal

Since Mr. Greenbaum has chosen to use biological and Darwinian analogies in his discussion about SAP and Oracle Applications, my reflections on his comments will contain similar analogous references.

While it is true that the natural world has competitive coexistence, parasitism, and symbiosis as basic strategies for survival, the root of all these strategies is adaptability. For any organism, or organization for that matter, to survive its changing environment successfully it must be highly adaptable. The organization that adapts most quickly is the one that continues.

Both SAP and Oracle have demonstrated over the last couple of decades that each had sufficient ability to adapt to the changing economic climate during the late 1980's through 1990s. SAP began its life as an ERP company. Oracle Corporation started as a tools company. Today SAP is still an ERP company that some see as "innovation free," whereas Oracle has become a much different entity. Larry Ellison and his management team have grown Oracle Corporation from a purely database company into a purveyor of software components including middleware, development tools, and ERP/CRM/HRMS.

An organization that needs to be adaptable due to market force changes, industry restructuring, or regulatory/governance requirements must be able to partner with a company that will be equally adaptable in its ERP offerings. A case in point is Dell Computers whose management, in an effort to maintain a competitive advantage, designed innovative manufacturing and distribution processes that could not be accommodated by the existing SAP system. Did Dell upgrade to a new version of SAP? Did it customize the existing SAP installation? No, Dell migrated to Oracle Applications.

Change is inevitable. Further, the rate of change is increasing, which also affects the rate of adoption of new ideas, technologies, products, and such. Mr. Greenbaum expresses optimism about Netweaver technology from SAP because the company has been working on it longer than Oracle has been working on its Fusion technology. However, if Netweaver is such a wonderful technological innovation, why isn't the adoption rate higher? In contrast, many of Oracle's Applications customers (the company claimed over 26,000 in September 2005) are already using Fusion technology.

For industries that experience less dramatic changes, perhaps SAP is an acceptable solution. For companies whose sustainable competitive advantage rests on an ability to change direction and adapt quickly to external pressures, Oracle Applications, with its flexibility and configurability, is a better choice. In fact, Oracle corporate culture, irrespective of what you may think or believe about its founder, appears to value adaptability to economic and market forces, which in my opinion will make it a better long term business partner than SAP.


Faun deHenry is President and CEO of FMT Systems Inc. Ms. deHenry has worked in small business for 20 years operating consulting and training organizations. After a decade of working on system integrations with such clients as PG&E, Tandem, Applied Materials and Brocade Communications, Ms. deHenry refined her thinking into the FMT delivery methodology. She can be reached at faun@fmtsystems.com.

 


Got comments, anecdotes or personal SAP vs. Oracle experiences to share? Send us an e-mail and let us know! You could win a $100 Amazon.com gift certificate!


 

This was first published in March 2006

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