“SAP’s installed base is very vulnerable”
Oracle CTO Larry Ellison fired both barrels at enterprise resource planning (ERP) software rival SAP in an Oracle earnings call late Thursday.
Many enterprise SAP customers are getting “price quotes of a billion dollars” for an upgrade to SAP’s HANA database, he claimed, sniffing blood in the water ahead of SAP’s plans to end support for software running on third-party databases.
Given that “SAP never rewrote their ERP applications for the cloud… SAP’s installed base is very vulnerable,” the Oracle founder added.
After 2025, SAP’s flagship ERP software will run exclusively on SAP’s own database, HANA. It currently works across databases, including Oracle.
But businesses migrating to the new system when support ends for non-SAP databases in 2025 will need to migrate their entire database. That shift represents a huge sales opportunity for Oracle and Ellison said the company is capitalising on it.
“A few months from now, in Q1 calendar year 2020, one of SAP’s biggest customers will go live on Fusion ERP. Many of SAP’s largest customers are already working with us to develop plans to migrate the Fusion ERP,” Ellison said.
“SAP’s customer base is up for grabs.”
The message from SAP’s UK and Ireland user group (UKISUG) suggests that may be more than hyperbole. As UKISUG’s chairman Paul Cooper put it at the group’s annual conference this month: “Customer trust and confidence is a very fragile thing. Topics like indirect licensing, the end of life of ECC6 and lack of clarity around the roadmap for S/4 HANA have not helped the customer relationship.”
Oracle Earnings: Company Reports a Strong Quarter
The comments came on a conference call for Oracle’s fiscal 2020 Q2.
The company reported total revenues of $9.6 billion. Cloud services and license support revenues accounted for the bulk of that figure, at $6.8 billion.
“We had another strong quarter in our Fusion and NetSuite cloud applications businesses with Fusion ERP revenues growing 37% and NetSuite ERP revenues growing 29%,” said Oracle CEO, Safra Catz.
He added: “This consistent rapid growth in the now multibillion dollar ERP segment of our cloud applications business has enabled Oracle to deliver a double-digit EPS growth rate year-after-year. I fully expect we will do that again this year.”
Catz had been co-CEO with Mark Hurd until Hurd stood down shortly before his death in October, and Oracle’s Ellison said he would not be recruiting another CEO.
“We have no plans for having a second CEO, it was an unusual situation, where Mark and Safra were an absolutely fantastic team,” Ellison said.
The company’s Autonomous Database running in Oracle’s public cloud business is growing at “over 100 percent” he added, saying: “We expect that growth rate to increase dramatically as we release our Autonomous Database running on our Gen2 Cloud@Customer into our huge on-premise installed base.”
Few Oracle events would be complete without a pop at AWS, of course, and the chairman of Oracle’s board of directors couldn’t resist at least one dig.
“We’re much cheaper than anything Amazon has,” he claimed.
“Much safer, much easier to use, [you can] build applications faster.”