John Matelski is far from convinced that SAP databases can seriously compete with Oracle.
Matelski is chief information officer and IT director for Georgia’s Gwinnett County, which runs Oracle Database as well as SAP applications. According to him, having an enterprise-class product and convincing customers to embrace it are two very different things.
“I do not believe there will be any significant short-term or long-term exodus, as switching database platforms requires a great deal of planning,” he said. “You need to have the right in-house resources who are trained and can support the move.”
SAP hopes to convince people like Matelski otherwise. With Sybase databases under its roof and new products such as SAP HANA, the company is aiming to be the No. 2 database vendor by 2015. That means it would have to leapfrog both Microsoft SQL Server and IBM DB2 in about three years -- and by no small margin. Even with its acquisition of Sybase, SAP still has less than 5% of the overall database revenue market, according to recent figures from Connecticut-based research group Gartner Inc. IBM and Microsoft are each around 20%, while Oracle is at nearly 50%.
“Switching to another database creates numerous technical concerns, including whether or not system stability can be maintained,” Matelski said. “In addition, there is always the concern as to whether an alternative solution can match all of the current capabilities.”
Lower price is not enough
According to Matelski, it takes a lot more than undercutting price to win customer support. He added that he’ll keep his eye on the SAP product roadmap, but said it will take time before it is considered a mainstream product, and therefore one he would be willing to migrate to.
So SAP has far to go before competing with Oracle and the rest on performance . Experts believe it can eventually, but as of now, it is not quite there yet. That said, SAP can inflict some damage in the database market in the next five years.
Donald Feinberg, analyst of database systems for Gartner, said that the various Oracle and SAP database products don’t all line up against each other in clean, apples-to-apples comparisons. But he thinks the in-memory appliance HANA has the potential to serve as a database foundation for multiple systems -- not just for business intelligence for SAP’s Business Information Warehouse (BW).
“Oracle Exalytics will never run under the SAP applications,” Feinberg explained, referring to Oracle’s in-memory database appliance. “HANA on the other hand, runs under BW today and will under SAP applications probably by the end of this year -- not in full availability, but in ramp-up.”
Why is this important? Because it opens up a broad range of situations where HANA could displace other databases. Feinberg estimated that 80% of SAP BW customers are running Oracle Database. If SAP approaches those customers with HANA, it should be able to pull some of them away. Analyst Noel Yuhanna of Forrester Research Inc. in Cambridge, Mass., estimated that 25% of all large SAP customers will be using HANA by 2015.
Oracle disagrees. During its most recent quarterly earnings call, Oracle executives dismissed the notion that SAP could compete with it in the database market. Oracle CEO Larry Ellison said he wanted the name of Hasso Plattner’s pharmacist, because the SAP co-founder “must be on drugs” for thinking SAP could compete with Oracle’s database business.
Oracle President Mark Hurd chimed in, saying he hasn’t seen many buyers for SAP’s HANA. But Feinberg said he and Ellison need to open their eyes. He said that according to Gartner figures, “there are far more (implementations of HANA) out there in the first six months than there were Oracle Exadata customers in its first 12 months.”
Prevalence of in-memory databases
There is one thing everyone agrees on: in-memory database technology is not going away.
Matelski, the CIO from Gwinnett County, Georgia, said that in-memory technology is important among companies running telecom, military or any real-time systems where milliseconds can make a difference. And he believes Oracle is dedicated to the technology, as evidenced by its acquisition of TimesTen in 2005 and the debut of its Exalytics appliance last fall.
“Oracle now markets [TimesTen] as a standalone database and an in-memory database cache to the Oracle database and touts the Oracle TimesTen In-Memory Database as the foundation product for real-time data management,” Matelski said.
During the recent Oracle earnings call, Ellison stated as much, arguing that TimesTen is the leading in-memory database and that HANA will have a difficult time competing with it, never mind Oracle Database, too.
Yuhanna said the biggest concern with HANA is whether it can scale to tens or hundreds of terabytes. Forrester doesn’t think that has been proven yet. There are other issues as well.
“Although SAP HANA is available as a read-write DBMS [database management system], we have only seen a handful of these implementations,” Yuhanna said. “I think SAP’s read-write HANA technology is not fully mature to support very complex SAP transactions or scale linearly, but it's only a matter of time when these limitations will be overcome.”
All in all, the key competitive question will center on how well HANA could be used beyond BW with SAP’s mission-critical enterprise applications.
“We believe that HANA will start to roll into transactional apps and possibly other non-SAP OLTP [online transactional processing] and BI apps in the future. SAP is taking a slower road to HANA -- it’s not in a hurry,” Yuhanna noted, adding, “But Oracle can definitely see SAP coming in its rearview mirror.”