Oracle’s attack on SAP’s Cloud and what it tells about SAP’s Cloud strategy

SUMMARY:

Dick Hirsch thinks the current war of words between Oracle and SAP on cloud topics comes down to one thing – messaging

cloudwarsThis is a guest post by Dick Hirsch, one of the most respected technical commentators inside the SAP community. As such, the layout and format conforms to the way Dick usually presents his thoughts. We provide some color at the end.

At the recent Oracle Open World (OOW) conference, Oracle co-founder Larry Ellison attacked SAP:

Ellison says that most of SAP’s cloud have used Oracle. “Ariba runs on Oracle. SuccessFactors runs on Oracle. They just bought Concur, it’s moving to Oracle. I have no idea what runs on HANA, but it ain’t their cloud. That runs on Oracle. It’s rude but it’s the truth.” [SOURCE]

Here is SAP’s response to the attack:

This boasting rings hollow. SAP has clearly stated its strategy. We are enabling all SAP applications, including our HCM portfolio and the Ariba Network, on SAP HANA as the superior innovation platform. With HANA our customers can handle more data, process more transactions, and derive more actionable insight. Ariba SpendVisibility, SAP Cloud for Sales, and SuccessFactors Workforce Analytics are already on HANA today with greater performance, simpler operations and higher user adoption. Key cloud applications built on HANA and productive with many customers today include Simple Finance, Customer Engagement Intelligence, SAP Cloud for Sales and Mobile Documents.

For those wanting the benefits of SAP HANA now, they can use our cloud extension package for SuccessFactors, making it easier than ever for customers, partners and developers to extend deployments, build entirely new applications and enable new processes that meet their unique business needs. [SOURCE]

Analysis

Ellison’s attack and SAP’s response reveal much about SAP’s cloud strategy and the market’s interpretation of this strategy. If you look at the attack and the response, HANA is the focus – not the Cloud or Cloud applications. Elllison’s attack is based on the fact that Oracle is still being used in these applications – regardless of the degree of this usage.

The relative success of SAP’s cloud applications (for example, SuccessFactors’ Employee Central recent placement in The Forrester Wave: SaaS HR Management Systems, Q4 2014 ) is irrelevant. What counts is only the fact that HANA is still being used in the applications. From SAP’s response above, however, the same focus is evident: “For those wanting the benefits of SAP HANA now, they can use our cloud extension package for SuccessFactors….”: the business benefits of these extensions isn’t important rather their ability to exploit HANA.

Note: Although OOW primarily focused on the Cloud, the battles between SAP and Oracle largely focus on databases so this emphasis from both companies might / should be expected.

SAP is largely responsible for this image problem based on its close linkage of its Cloud portfolio and HANA. Many of the most important SAP’s Cloud products are branded with “HANA” (HANA Cloud Platform, HANA Enterprise Platform, etc). This focus was also evident in the recent Cloud Deep-Dive presented by SAP after which analyst Phil Wainewright stated:

I suspect that a large part of the problem is the conflation of cloud messaging with HANA messaging.

Ellison’s attack shows the results of such conflation.

This HANA focus also impacts the ability of SAP’s other cloud offers to gain greater market penetration. For me, this problem was perfectly demonstrated by this tweet from Amit Zavery (“GVP and GM, Integration Products (SOA, Data Integration), Fusion Middleware @Oracle) during the OOW.

The fact that SAP has a PaaS platform that has been GA since 2 years as HANA Cloud Platform evangelist Matthias Steiner responded, obviously hasn’t made the rounds in Oracle’s offices. Zavery wasn’t the only one to ignore the HCP. Ellison obviously doesn’t know about HCP:

Ellison distinguished Oracle as “the only cloud vendor that lets you use the same platform it builds on to extend cloud apps.” That’s a contrast with Salesforce.com, which, he said, “uses Oracle’s platform” to build its apps while relegating customers to extending apps with its “proprietary” Force.com and Salesforce1 platforms. Ellison hastened to add that “Salesforce is the best of the rest because at least they have a platform. The other guys — Workday — they don’t even have a platform. It’s missing in action.” [SOURCE]

HCP extensions are already productive for SuccesFactors and the associated integrations with other SAP products are expected soon. Evidently, the marketing message regarding HCP has not been the central focus of SAP’s cloud efforts. Steve Lucas, President, SAP Platform Solutions even tweeted:

Unfortunately, the level of market penetration/awareness of HCP is still so low that such tweets are necessary.

The upcoming SAP TechEd && d-code events provide SAP the opportunity to tighten up its cloud messaging. I agree that HANA and Cloud work well together but I think it is imperative that the balance in this messaging starts to tip more towards ‘Cloud’ rather than ‘HANA.’

Den’s take

Dick speaks with the kind of authority that matters. He is dealing with these technologies on behalf of customers every day of the week. In doing so, he has hit on one of the central issues around this topic that serves to muddy the waters when trying to assess reality. Messaging matters a great deal in this industry. Get it wrong or have it confused and you open the door to competitive posturing. Get it right and you gain market advantage. That doesn’t always translate into deals won, but that’s a separate story.

Disclosure: SAP and Oracle are premier partners at time of writing. Dick was not solicited by diginomica to provide this insight althought we are thrilled to take it as a fresh contribution to this emerging story.

Image credit: © Rob Hyrons – Fotolia.com

    Comments are closed.

    1. vijayasankarv says:

      dahowlett rhirsch when IBM , Oracle and SAP say cloud – it gives the impression that each have ONE unifying cloud .Hence all the confusion

    2. bhaines0 says:

      vijayasankarv dahowlett rhirsch yes, Marchitecure has always been a staple diet for the trad EnSW crowd.

    3. vijayasankarv says:

      bhaines0 dahowlett rhirsch at a certain size and complexity of portfolio , I think it is a necessary evil .

    4. dahowlett says:

      vijayasankarv BHaines – at a certain size and complexity it is a ball and chain. Especially for an apps company

    5. greg_not_so says:

      SAP_Jarret rhirsch jonerp < it pretty much sums it up very well but i see the opportunity for others to step in