SAPAMZNORCLMSFT – the old new apps infrastructure landscape

SUMMARY:

Does the Oracle and Microsoft alliance represent a significant change or a clarification of the existing market? My take is it is more of the latter than the former.

There’s an old saw in the software applications market that says: you can have fast, cheap, good – pick two. Now you can have all three. Here’s what I mean as it relates to large enterprise.

  1. Yesterday, Oracle and Microsoft buried the hatchet and became new BFF. They represent a solid choice for organizations not wishing to take risk but which might wish to reduce cost by migrating existing applications to the Microsoft Azure ‘cloud,’ while preserving investments in existing Oracle applications.
  2. Next we have Amazon plus all the (relative) cloud based newbies such as Workday and re-invented vendors like Infor that take advantage of Amazon’s low cost, pay as you go compute power and storage. Many of the applications are what enterprise would class as ‘features.’ Even so, this model allows organizations to try new things at modest or low risk.  
  3. Finally, we have SAP, the vendor that is striving hard to transform itself with its HANA push and cloud side play. SAP Business Suite on HANA allows organizations to gain a more streamlined applications and analytics landscape while having the longer term potential to add on entirely new, HANA applications coming from SAP and its ecosystem.  

Despite what any vendor will claim, the facts of life are that large enterprise is invested in all these technologies. In my view the Oracle/Microsoft announcement provides a clarity that has been missing in the market around how applications can and will be deployed.

All would like us to believe they are leading innovators. The problem is that ‘innovation’ is defined differently, depending on who is speaking. You can for instance take Oracle at its word but argue that the new partnership represents innovation at the delivery model level. For many, that’s a good thing.

For those looking at a ‘cloud first’ policy, there will be continued steady attrition by department to the ‘Amazon crowd,’ but core back office applications are unlikely to migrate to the cloud en masse until Oracle and SAP decide that’s the way to go. Some will say ‘But hey, both companies are saying they’re all in on the cloud.’ That may be the marketing rhetoric but it isn’t evidenced in the deal values. And given the ruckus over PRISM, you could easily argue that large enterprise cloud plays just took a big hit. But at least you have some infrastructure choices now that Oracle has become BFF’s with Microsoft.

In case you’re wondering how I come to these conclusions then check out how the financial markets view these stocks. While I often decry the financial analyst community as a bunch of tech muppets, on this occasion, their broad assessment looks about right to me.

But then I might be completely wrong…

Feature image credit: © Petr Ciz – Fotolia.com