Coming off a great 2011, with a 25 percent jump in software revenue, SAP is ready to set the bar even higher for the year ahead. The German-based enterprise-software maker plans to focus aggressively in the database and cloud computing market for business users, competing head on with Oracle.
On Wednesday, the company held a news conference in Frankfurt to outline a plan building on its success and targeting new opportunities.
ERP for HANA
SAP said it will support an Enterprise Resource Planning (ERP) module for its HANA in-memory database platform by the end of this year. The new module will include programs for financials, human resources, and operations. It will be offered as part of SAP's Business Suite product family, which is also being developed for HANA.
HANA, which uses memory to store data instead of disks, has been an instrumental part of the company's successful 2011 year. The HANA acronym stands for High-performance ANalytic Appliance, and refers to a system of hardware from third-party vendors that is optimized to work with SAP's advanced HANA technology. SAP reports that HANA's high-performance capabilities enable companies to crunch data faster and more efficiently than ever before.
Going Head to Head
Traditionally, SAP has been the king of ERP, with 24 percent of the market in 2010, followed by Oracle at 18 percent. From this position of strength, SAP said that it will use ERP on HANA as a key driver in its goal to become the leading database company.
But that is, indeed, an ambitious goal. According to industry research firm Gartner, Oracle had 48 percent of the 2010 database market, while SAP had only about 2 percent.
SAP's co-CEO Jim Hagemann Snabe told news media that in-memory database technology -- like that used in SAP's HANA appliance -- is changing the database market, and will spearhead SAP's effort to eclipse Oracle.
SAP has been a leader in Enterprise Resource Planning since its early years. In contrast, Oracle moved into the world of enterprise apps more recently from its database origins, largely driven by acquisitions of other software providers including Siebel, PeopleSoft, and JD Edwards, over the past several years.
SAP's acquisitions of database provider Sybase in 2010 and business-intelligence software vendor Business Objects back in 2007 are helping level the playing field, enabling SAP to become more competitive with Oracle.
SAP has targeted small-to-medium businesses, with several product lines tailored for SMB needs, while Oracle has provided fewer efforts focused at that segment. Otherwise, there are few differentiators in many overlapping product areas between the two in terms of price, system integration or functionality.
The Acquisitions Continue
Last month, SAP announced it was acquiring SuccessFactors, which provides cloud-based human capital management. Industry observers saw the move as an effort by SAP to shore up its position in cloud-based solutions, especially as Oracle moves more aggressively into the cloud.
Other SAP cloud apps include Business ByDesign for ERP, Sales OnDemand for CRM, Carbon Impact OnDemand for sustainability, and Travel OnDemand for expense reporting.
In October, Oracle announced it would acquire RightNow Technologies, a cloud-based customer-service software provider, best known for its CRM (customer relationship management) programs. Oracle is also providing cloud-based solutions for sales force automation, human resources, talent management, and social networking, in addition to databases and Java.
Oracle has said it will make RightNow a complete platform for customer service for B2C and B2B markets, with analytics, CRM, e-commerce, marketing, supply chain, and other functions.