Oracle challenges German rival SAP
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Oracle Corp. chief Larry Ellison is girding for a showdown with business applications software leader SAP AG and becoming more friendly with frequent rival IBM Corp. as his software company seeks higher profits from its recently completed takeover of PeopleSoft Inc.
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Business software giant Oracle remained at odds Friday with BEA Systems over a potential takeover bid after the two rivals exchanged letters holding firm to their positions over the price for BEA.
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A U.S. district court judge has ordered that&#160;Oracle&#39;s lawsuit against SAP and its TomorrowNow subsidiary&#160;be sent to mediation, according to a court document posted on www.tnlawsuit.com, a Web site SAP set up for the case.
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(InfoWorld) - When it comes to Oracle Corp.'s on-demand software business, the normally outspoken vendor has tended to be somewhat reticent about how it defines both the scope and focus of its operation. Recently, however, the company has begun to talk more openly about software-as-a-service (SaaS), an approach that it sees as applicable to all Oracle offerings. Earlier this month, Oracle revealed it had more than 2,200 on-demand customers, representingÂ more thanÂ 1.7 million users. In its most recent financial quarter ended Aug. 31, 2006, the vendor reported that its on-demand revenue rose 48.8 percent to $125 million, compared with the year-ago quarter. IDG News Service talked this week to the man who heads up Oracle's on-demand operations, Juergen Rottler, the company's executive vice president of Oracle Customer Services. An edited transcript of that conversation follows. IDGNS: What's Oracle's take on on-demand software? Rottler: There's a lot of interest and hype in the marketplace around on-demand, particularly in the salesforce automation space, whether it's RightNow [Technologies Inc.] or Salesforce.com Inc. or our Siebel CRM On Demand. Oracle is the only company that can offer an overarching on-demand platform for all applications and for all business processes and for different technologies -- database and middleware -- it doesn't have to just be applications. IDGNS: At last month's OpenWorld conference, Oracle Chief Executive Officer Larry Ellison described the company's on-demand business as the same size as Salesforce.com's; is that correct? Rottler: It's very hard to compare our businesses; it's a bit like an apples-to-oranges comparison. We have so many different deployment options and we don't count software licenses and support as part of on-demand revenue. I'll stick with Larry's statement from OpenWorld. We're a very large company. As a part of Oracle, on-demand isn't a huge business, but we have a very significant interest in it. IDGNS: How does your approach differ from that of, say, SAP AG, which appears to be adopting a more cautious approach to on-demand? Rottler: SAP is struggling in this space. They see it more as an on-ramp as driving users to more traditional [on-premise] software. We've been in the on-demand business for nearly seven years. It's influenced our development priorities, how we run our business and it's influenced our data centers. We really have an on-demand platform. We see partners take that platform for applications across the entire enterprise. We have on-demand versions for all of our applications including the ones we acquired. We've a revamped release of PeopleSoft Enterprise On Demand and we have Oracle On Demand for Siebel CRM as well as Siebel CRM On Demand. We have all our retail 'on-demanded' -- Retek and ProfitLogic -- and our G-Log logistics. We're working on a Portal solution. IDGNS: Who does the bulk of the hosting of your on-demand software -- Oracle or your partners -- in percentage terms? Rottler: In most cases where partners are hosting, it's because the customer already has someone to outsource their software. Depending on the geography, it's in the 20 to 30 percent range. The majority of our business is hosted out of our data centers. IDGNS: Where are your data centers and do you expect to open more outside the U.S. as your on-demand operation grows? Rottler: Our most well-known data center is in Austin, Texas. Our other data centers serve as disaster recovery or back-up sites. We don't talk about them or their location a lot of time for security reasons. For local capabilities, we tend to partner. We're fortunate that we can look at all options, but we'll most likely go with partners. IDGNS: How does your on-demand business look on a regional basis, is it dominated by the U.S.? Rottler: It mirrors the regional themes for broader [IT] outsourcing adoption. North America today is sort of ahead, but Europe is definitely not lagging. It's fast catching up to North America and is led by the U.K. We have a very strong business in Latin America and lots of success in Asia-Pacific anchored in Australia. Our four strongest markets are North America, the U.K., Latin America and Australia. IDGNS: Is there an average size for your on-demand customers? Rottler: It ranges from a few individuals to thousands of users. In general, our on-demand customers and the number of users are growing bigger, quite a bit bigger. We're seeing great interest among Fortune 100 companies. On-demand isn't just for small to midsize businesses. IDGNS: Larry Ellison is an investor in both Salesforce.com and NetSuite Inc. Has it been useful for Oracle to observe what those on-demand companies have been doing? Rottler: Larry's been a believer in this new way of doing business for many years. He's made significant investments in us and in other on-demand companies. We believe this is a market worth developing to create a broader ecosystem. We're also a very important platform provider. Salesforce.com runs on our databases and middleware. They're a customer, NetSuite similarly. We're in competition; in other areas, but they're also customers of ours. We participate in the market in multiple ways. IDGNS: Who do you see as your primary competition both now and in future? Rottler: Ultimately, it will be the same people we compete against today. SAP has been a bit unfocused and haphazard and it'll take them some years to come up to scratch. We're waiting to see if Microsoft [Corp.] can successfully enter the market. The rest of the competition are niche players. The challenge for them is can they broaden their products and be relevant in a broader context? We're a huge company that can provide an individual on-demand service or a multitenant solution securely; others don't have those options. Some players won't be around in future. IDGNS: Oracle has yet to really talk up its on-demand business, is that likely to change? Rottler: You will see us continue to raise the noise level a little. We've had a lot of other Oracle news to cover in the past quarters. On-demand is picking up, there's a lot of activity. IDGNS: What about Oracle's own internal on-demand deployments? Does the company's fondness for eating its own dog food extend to hosted software? Rottler: We look at Oracle as one big on-demand customer. There are many parts of our business running the same platform and products as our on-demand customers.
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Oracle's Ellison has made SAP enemy No. 1. But SAP is fighting back the right way: by getting customers.
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SAP AG has benefited from the market uncertainty created by the long battle between Oracle Corp. and Peoplesoft Inc. Now that the battle is over, the dominant business applications maker doesn&#39;t see the good times ending.
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SAP, the world's leading maker of business software, said it was not concerned by the creation of a new number two in the sector via the merger of rivals Oracle and Peoplesoft in the United States.
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Oracle Corp.  posts  quarterly results next week with investors watching for signs  of further strength in its business applications software as it  chases industry leader SAP AG .
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German business software firm SAP AG unveiled new enterprise software aimed at information workers during its TechEd developer conference in Las Vegas.  SAP Enterprise Search goes much "deeper" than ordinary text-based search engine, claimed officials at the Waldorf-based firm.
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Blog: SAP said it plans to formally respond by midnight (PST) Monday to Oracle's lawsuit, which claims SAP's wholly owned subsidiary TomorrowNow accessed Oracle's proprietary support and maintenance information beyond contractually allowed levels.
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Software maker SAP AG announced Wednesday that it had acquired a Texas-based maintenance firm for PeopleSoft platforms in a move to attract customers from its main competitor, Oracle Corp.
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Software giant makes bid in an attempt to challenge growing might of Google
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SAP AG waited until almost the last minute to refute Oracle Corp.'s strongly worded legal complaints accusing it of stealing trade secrets in a bid to attract new customers.
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SAP has a new SaaS suite, which may end up being its biggest competitor.
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I2 Technologies accused SAP of patent infringement in a lawsuit filed Tuesday.
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Software maker SAP AG  admitted a subsidiary had carried out "inappropriate downloads" of documents belonging to archrival Oracle Corp but said on Tuesday SAP itself had not had access to that material.
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Increase in revenue from new software licenses helped SAP increase Q2 profits, despite stiff competition from Oracle.