SAP to Oracle: “I will drink your milkshake”


News flash: SAP is a database company. At least that’s its story and it’s sticking to it.

SAP has long been the enterprise software company, the leader in enterprise resource planning (ERP) and other mission-critical applications that typically ran on some other company’s database. At one point not that long ago, 60 percent of SAP applications ran on Oracle databases, for example.

SAP’s new positioning as a database provider may not surprise folks new to SAP who are impressed with its Hana analytics database appliance. But it is jarring to long timers who were puzzled when SAP bought Sybase two years ago for $5.8 billion. Sybase was something of a database has-been at that point.

What SAP got in that deal was a slick SQL Anywhere mobile database and a dwindling customer roster of the big Sybase ASE database which competes with Oracle. To be sure, Sybase retained some key financial services customers, but by most accounts, Oracle had eaten Sybase’s lunch. For the last few years, when it came to database market share, Oracle typically led the field in terms of revenue, Microsoft SQL Server led in units sold. IBM DB2 usually rounded out the top three. And then there was Sybase.

Fueled by Hana, SAP gets spunky

With its database aggression, SAP is turning the tables on  Oracle which took on SAP by buying PeopleSoft, Siebel Systems and other companies to build up its enterprise software portfolio. Lately, it’s made claims about its leadership in analytics — another field SAP is attacking since buying BusinessObjects.

SAP’s big database talk came at a press event Tuesday where it outlined its database and mobile strategies. (For the record, the news was that Sybase ASE is now available as a database option for SAP’s Business Suite , that NetWeaver Business Warehouse is also now available for Hana, and that SAP bought mobile app maker Syclo.)

Steve Lucas, SAP’s global EVP and GM, was feisty in his take-down of Oracle — although he never mentioned it by name: “Call me crazy, but nobody that runs a company gets up and thinks ‘I need a giant refrigerator size appliance to solve my business problem’.” The appliance in question is no doubt Oracle’s Exadata database appliance. (Hana is also an appliance, but perhaps a bit more diminutive.)

In the email about the event, SAP said it would articulate its “unified database vision and demonstrate how the company intends to become the #2 database vendor by 2015.”

It’s got its work cut out for it.

SAP to do list: Win developers, partners

If it wants to succeed here, SAP needs to recruit ISVs, developers and other partners to build applications atop the Hana appliance and — by extension the rest of the SAP/Sybase database platform.

It appears to know that. The company  created a new $155 million fund managed by its SAP Ventures arm to help build a network of startups and developers.  This effort is an outgrowth of the first SAP Startup Forum, in Palo Alto in March.

It also needs to change the perception of SAP as a provider of  enterprise applications that run on third-party databases. That’s what today’s unambiguous message was all about.

SAP has legitimate claims to database credibility — Sybase even as it struggled had some good technology and Hana is a bona fide hit. Still, just saying you’re a database company doesn’t make it so. For the foreseeable future Oracle — which faces its own set of credibility issues in the era of big data — remains the database company to beat.

Photo courtesy of Flickr user Brandi Jordan

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